By NICHOLAS D. KRISTOF
New York Times - October 27, 2010 - LOS ANGELES
I dropped in on a marijuana shop here that proudly boasted that it sells “31 flavors.” It also offered a loyalty program. For every 10 purchases of pot — supposedly for medical uses — you get one free packet.
“There are five of these shops within a three-block radius,” explained the proprietor, Edward J. Kim. He brimmed with pride at his inventory and sounded like any small businessman as he complained about onerous government regulation. Like, well, state and federal laws.
But those burdensome regulations are already evaporating in California, where anyone who can fake a headache already can buy pot. Now there’s a significant chance that on Tuesday, California voters will choose to go further and broadly legalize marijuana.
I hope so. Our nearly century-long experiment in banning marijuana has failed as abysmally as Prohibition did, and California may now be pioneering a saner approach. Sure, there are risks if California legalizes pot. But our present drug policy has three catastrophic consequences.
First, it squanders billions of dollars that might be better used for education. California now spends more money on prisons than on higher education. It spends about $216,000 per year on each juvenile detainee, and just $8,000 on each child in the troubled Oakland public school system.
Each year, some 750,000 Americans are arrested for possession of small amounts of marijuana. Is that really the optimal use of our police force?
In contrast, legalizing and taxing marijuana would bring in substantial sums that could be used to pay for schools, libraries or early childhood education. A Harvard economist, Jeffrey A. Miron, calculates that marijuana could generate $8.7 billion in tax revenue each year if legalized nationally, while legalization would also save the same sum annually in enforcement costs.
That’s a $17 billion swing in the nation’s finances — enough to send every 3- and 4-year-old in a poor family to a high-quality preschool. And that’s an investment that would improve education outcomes and reduce crime and drug use in the future — with enough left over to pay for an extensive nationwide campaign to discourage drug use.
The second big problem with the drug war is that it has exacerbated poverty and devastated the family structure of African-Americans. Partly that’s because drug laws are enforced inequitably. Black and Latino men are much more likely than whites to be stopped and searched and, when drugs are found, prosecuted.
Here in Los Angeles, blacks are arrested for marijuana possession at seven times the rate whites are, according to a study by the Drug Policy Alliance, which favors legalization. Yet surveys consistently find that young whites use marijuana at higher rates than young blacks.
Partly because of drug laws, a black man now has a one-in-three chance of serving time in prison at some point in his life, according to the Sentencing Project, a group that seeks reform in the criminal justice system. This makes it more difficult for black men to find jobs, more difficult for black women to find suitable husbands, and less common for black children to grow up in stable families with black male role models. So, sure, drugs have devastated black communities — but the remedy of criminal sentencing has made the situation worse.
The third problem with our drug policy is that it creates crime and empowers gangs. “The only groups that benefit from continuing to keep marijuana illegal are the violent gangs and cartels that control its distribution and reap immense profits from it through the black market,” a group of current and former police officers, judges and prosecutors wrote last month in an open letter to voters in California.
I have no illusions about drugs. One of my childhood friends in Yamhill, Ore., pretty much squandered his life by dabbling with marijuana in ninth grade and then moving on to stronger stuff. And yes, there’s some risk that legalization would make such dabbling more common. But that hasn’t been a significant problem in Portugal, which decriminalized drug use in 2001.
Likewise, medical marijuana laws approved in 1996 have in effect made pot accessible to any adult in California, without any large increase in usage. Special medical clinics abound where for about $45 you can see a doctor who is certain to give you the medical recommendation that you need to buy marijuana. Then you can visit Mr. Kim and choose one of his 31 varieties, topping out at a private “OG” brand that costs $75 for one-eighth of an ounce. “It’s like a fine wine, cured, aged, dried,” he boasted.
Or browse the online offerings. One store advertises: “refer a friend, get free joint.” And the world hasn’t ended.
One advantage of our federal system is that when we have a failed policy, we can grope for improvements by experimenting at the state level. I hope California will lead the way on Tuesday by legalizing marijuana.
Thursday, October 28, 2010
CEO Salaries vs. Company Profits
By Focus Editors
Daniel Akerson was brought in as Wagoner's replacement, and has gone on record saying that he took the job because he believes in the government's decision to save General Motors. "[The bailout] was absolutely the right decision for this company, for this region, for the manufacturing base of the United Sates," Akerson told the Washington Post. "I wouldn't have agreed to go on the board...if I hadn't agreed with that decision."
Frederick Waddell of Northern Trust
Northern Trust received one of the smallest government bailout appropriations of 2008, totaling just $1.6 billion. This is why it was so shocking to see CEO Frederick Waddell recieve a compensation package of over $6 million that same year. As reported By CommonCause.org, this money came mostly in the form of stock, options, and salary. Under Waddell's leadership, Northern Trust succeeded in paying the off the government bail out in full in under a year. In 2009, the institution issued a press release proudly announcing this accomplishment, and that same year Forbes reported that Waddell's compensation has nearly doubled, increasing to $11.89 million. The raise was no doubt justified by his quick action in repaying the debt.
Lloyd Blankfein, CEO of the recently indicted Goldman Sachs, reportedly took home over $70 million in 2008 alone. That same year, Goldman Sachs was bailed out to the tune of $10 billion, leading many to question the rationale behind Blankfein's massive compensation. The Huffington Post claims that that this compensation makes over $125 million over the past 10 years.
In 2009, the company was brought up on charges of sub prime mortgage fraud by the Securities and Exchange Commission, who claimed that the organization deliberately marketed bad loans in a deceptive manner. The Post reports that Blankfein settled with the SEC in July to the tune of $550 million.
Jamie Dimon of JPMorgan Chase
In what feels like a total slap in the face, JPMorgan Chase CEO Jamie Dimon somehow found the budget room to snag a $28 million bonus package in late 2007 despite JPMorgan Chase being in such poor financial shape that they needed a $25 billion government bail out a mere year later. As if this wasn't bad enough, CNN reports that 2009 brought about another round of bonuses for Dimon, this time in the amount of $16 million.
BusinessWeek announced that President Obama was having dinner with Jamie Dimon to dinner to discuss financial reform at the White House. Since the meeting, no official reports have been released disclosing what was discussed.
America is still picking up the pieces of the worst financial disaster in decades, and the bulk of the damage struck in the financial market. In a time where you might think banks would be keeping their money internal to repair and rebuild their organizations, we have instead gaped in horror as some of these same executives receive multimillion dollar bonuses year after year. In fact, a study performed by the Associated Press in 2008 found that $1.6 billion of total government bail out money (money provided to fledgling organizations intended to keep them from total collapse) went straight to various executives pockets. Today we explore where some of that morally-questionable money went.
Ken Lewis of Bank Of America
The Huffington Post reports that Bank Of America received $25 billion in bail out money in 2008, and an additional $20 billion in 2009 to cover the loss they took when they acquired Merrill Lynch. This massive infusion of government money came only one year before Ken Lewis stepped down from the office of CEO with $83 million in compensation packages. The bank was more eager than some other bailed out companies to pay back its debts to the government, and succeeded in doing so late last year. But thePost makes clear that this was not out of any moral or ethical dedication to their duty, but mostly so that their executives would not be hindered by government pay restrictions imposed on bailed out companies.
In 2008, the same year that Citigroup accepted a $45 billion government bailout, MarketWatch reports that former CEO Vikram Pandit took home a benefits package worth $38.2 million. This package consisted mostly of stocks and options, combined with a $958,333 annual salary. Interestingly enough, Pandit declined the opportunity to be considered for huge bonuses, and committed to working for $1.00 in base pay until the company was back to profitability. Additionally, the CEO reimbursed Citigroup over $170,000 for personal use of the company aircraft.
Martin Sullivan of AIG
CNBC reported that Martin Sullivan retired from the collapsing offices of AIG, but not before pocketing a $47 million stock and benefits package. Only a few months later AIG was approved for $85 billion in government bailout funds. Slate.com reports that this king's ransom was raised from selling off federal securities, bringing the fed down below $200 billion in reserves.
Being the world's largest insurance company, the US government saved AIG to avoid the disastrous outcome on the financial market that would have occurred if the company collapsed. If AIG was allowed to go under, NPR reports that it would have resulted in $185 billion worth of damage to the world financial market, a blow that would have resulted in "substantially higher borrowing costs, reduced household wealth, and a materially weaker economic performance."
According to the New York Times, former General Motors CEO Richard Wagoner received a $14.4 million dollar "goodbye" package in 2008. That same year, the US government appropriated $50 billion in bailout money to save the auto manufacturer from tanking. CommonCause.org reports that the majority of this money came from pension and stock benefits, along with a $1.55 million salary.
Ken Lewis of Bank Of America
The Huffington Post reports that Bank Of America received $25 billion in bail out money in 2008, and an additional $20 billion in 2009 to cover the loss they took when they acquired Merrill Lynch. This massive infusion of government money came only one year before Ken Lewis stepped down from the office of CEO with $83 million in compensation packages. The bank was more eager than some other bailed out companies to pay back its debts to the government, and succeeded in doing so late last year. But thePost makes clear that this was not out of any moral or ethical dedication to their duty, but mostly so that their executives would not be hindered by government pay restrictions imposed on bailed out companies.Vikram Pandit of Citigroup
In 2008, the same year that Citigroup accepted a $45 billion government bailout, MarketWatch reports that former CEO Vikram Pandit took home a benefits package worth $38.2 million. This package consisted mostly of stocks and options, combined with a $958,333 annual salary. Interestingly enough, Pandit declined the opportunity to be considered for huge bonuses, and committed to working for $1.00 in base pay until the company was back to profitability. Additionally, the CEO reimbursed Citigroup over $170,000 for personal use of the company aircraft.Martin Sullivan of AIG
CNBC reported that Martin Sullivan retired from the collapsing offices of AIG, but not before pocketing a $47 million stock and benefits package. Only a few months later AIG was approved for $85 billion in government bailout funds. Slate.com reports that this king's ransom was raised from selling off federal securities, bringing the fed down below $200 billion in reserves.Being the world's largest insurance company, the US government saved AIG to avoid the disastrous outcome on the financial market that would have occurred if the company collapsed. If AIG was allowed to go under, NPR reports that it would have resulted in $185 billion worth of damage to the world financial market, a blow that would have resulted in "substantially higher borrowing costs, reduced household wealth, and a materially weaker economic performance."
Richard Wagoner of General Motors
According to the New York Times, former General Motors CEO Richard Wagoner received a $14.4 million dollar "goodbye" package in 2008. That same year, the US government appropriated $50 billion in bailout money to save the auto manufacturer from tanking. CommonCause.org reports that the majority of this money came from pension and stock benefits, along with a $1.55 million salary.
Daniel Akerson was brought in as Wagoner's replacement, and has gone on record saying that he took the job because he believes in the government's decision to save General Motors. "[The bailout] was absolutely the right decision for this company, for this region, for the manufacturing base of the United Sates," Akerson told the Washington Post. "I wouldn't have agreed to go on the board...if I hadn't agreed with that decision."
Frederick Waddell of Northern Trust
Northern Trust received one of the smallest government bailout appropriations of 2008, totaling just $1.6 billion. This is why it was so shocking to see CEO Frederick Waddell recieve a compensation package of over $6 million that same year. As reported By CommonCause.org, this money came mostly in the form of stock, options, and salary. Under Waddell's leadership, Northern Trust succeeded in paying the off the government bail out in full in under a year. In 2009, the institution issued a press release proudly announcing this accomplishment, and that same year Forbes reported that Waddell's compensation has nearly doubled, increasing to $11.89 million. The raise was no doubt justified by his quick action in repaying the debt.Lloyd Blankfein of Goldman Sachs
In 2009, the company was brought up on charges of sub prime mortgage fraud by the Securities and Exchange Commission, who claimed that the organization deliberately marketed bad loans in a deceptive manner. The Post reports that Blankfein settled with the SEC in July to the tune of $550 million.
Jamie Dimon of JPMorgan Chase
In what feels like a total slap in the face, JPMorgan Chase CEO Jamie Dimon somehow found the budget room to snag a $28 million bonus package in late 2007 despite JPMorgan Chase being in such poor financial shape that they needed a $25 billion government bail out a mere year later. As if this wasn't bad enough, CNN reports that 2009 brought about another round of bonuses for Dimon, this time in the amount of $16 million.BusinessWeek announced that President Obama was having dinner with Jamie Dimon to dinner to discuss financial reform at the White House. Since the meeting, no official reports have been released disclosing what was discussed.
Who Really Cares About Inequality?
Posted by Kevin Carson on Oct 27, 2010
In my previous column (“Yes — The Rent Really Is Too Damn High,” C4SS Oct. 26) I pointed out the prevalence of rents on artificial property rights, and all the ways in which we pay tribute to privileged classes for the immense “service” of not obstructing our access to opportunities to apply our labor to the material world.
The question arises, though, of their motive. And I strongly suspect their motivation is not exhausted by material considerations like the amount of wealth they get from extorting tribute for the right to produce.
I suspect their motivation is, to a large extent, about control and status.
Right-wingers are fond of arguing that egalitarian lefties are irrational for caring about inequality of wealth. So long as you have a high material standard of living, and it’s increasing for everyone, who cares if someone else has more than you? But in reality, I think it’s the super-rich ruling elites who really care about inequality. For them, though, what it boils down to is that no amount of absolute wealth is enough for them, if everyone else has just as much and the positional goods entailed in wealth and power are missing.
What appeal would there be, for David Rockefeller or Bill Gates, in a world where everyone had a cheap Star Trek matter-energy replicator that could provide them with an unlimited standard of living — and in which that standard of living was available to everyone free and clear, without dependence on anyone else?
Most of the hierarchical institutions in our world, and the people running them, exist only for the sake of rationing scarce goods. The management at your workplace, and the sense of identity they get from their jobs, all revolve around the fact of scarcity and your dependence on them to keep paying the rent and grocery bill. In a world where they no longer get status from control over other people’s livelihoods, they’d be strangers in a strange land. A world in which all the hierarchical institutions formerly required to regulate scarcity become redundant and irrelevant — in which every single person was the equal of Gates and Rockefeller in wealth and power, and could tell them to go to hell with impunity — would be intolerable for them. What fun would it to live like a king, if everyone was a king?
The character of “The Major,” in Daniel Suarez’s “Daemon” novels, saw his role as defending a system of authority and subordination, and keeping the institutional wheels turning efficiently. This meant, above all, keeping the populace dependent on the existing institutional framework for their survival. Confronted with the threat from an economy of abundance — the super-efficient, high-tech local economies of the “holons,” based on micromanufacturing and intensive agriculture — he reacted with total revulsion. He fought a total war, with death squad terror and scorched earth, to raze the holons to the ground and erase their existence from living memory, because of their subversive effect in demonstrating that people could live without authority.
Something like this was the thesis of “Goldstein’s Book,” in 1984. The industrial economies of the 20th century created the problem of abundance: a populace with enough leisure to remove their noses from the grindstone and start asking pointed questions about the age-old systems of authority they observed in their world. In order to maintain the power of the old ruling hierarchies — the kings and priests, the bureaucrats, the owners and employers — it was necessary to destroy the subversive threat of abundance, and to keep the general public poor and stupid. The beauty of perpetual war with Eurasia and Eastasia was that it enabled Oceania to blast unlimited amounts of economic output into the stratosphere or sink them to the bottom of the sea, and push everyone down to the margin of subsistence so they’d be too busy staying alive to ask all sorts of impertinent questions.
This problem — how to maintain the power of the old ruling hierarchies where there is no longer a material need for them — is a recurring theme in literature. It’s the subject of the satirical Report from Iron Mountain, a fictitious government document addressing the need for some moral equivalent of war to maintain public deference to the ruling and owning classes in the face of the subversive effects of world peace.
It’s the people at the top of the pile, not those at the bottom, who care most about inequality.
In my previous column (“Yes — The Rent Really Is Too Damn High,” C4SS Oct. 26) I pointed out the prevalence of rents on artificial property rights, and all the ways in which we pay tribute to privileged classes for the immense “service” of not obstructing our access to opportunities to apply our labor to the material world.
The question arises, though, of their motive. And I strongly suspect their motivation is not exhausted by material considerations like the amount of wealth they get from extorting tribute for the right to produce.
I suspect their motivation is, to a large extent, about control and status.
Right-wingers are fond of arguing that egalitarian lefties are irrational for caring about inequality of wealth. So long as you have a high material standard of living, and it’s increasing for everyone, who cares if someone else has more than you? But in reality, I think it’s the super-rich ruling elites who really care about inequality. For them, though, what it boils down to is that no amount of absolute wealth is enough for them, if everyone else has just as much and the positional goods entailed in wealth and power are missing.
What appeal would there be, for David Rockefeller or Bill Gates, in a world where everyone had a cheap Star Trek matter-energy replicator that could provide them with an unlimited standard of living — and in which that standard of living was available to everyone free and clear, without dependence on anyone else?
Most of the hierarchical institutions in our world, and the people running them, exist only for the sake of rationing scarce goods. The management at your workplace, and the sense of identity they get from their jobs, all revolve around the fact of scarcity and your dependence on them to keep paying the rent and grocery bill. In a world where they no longer get status from control over other people’s livelihoods, they’d be strangers in a strange land. A world in which all the hierarchical institutions formerly required to regulate scarcity become redundant and irrelevant — in which every single person was the equal of Gates and Rockefeller in wealth and power, and could tell them to go to hell with impunity — would be intolerable for them. What fun would it to live like a king, if everyone was a king?
The character of “The Major,” in Daniel Suarez’s “Daemon” novels, saw his role as defending a system of authority and subordination, and keeping the institutional wheels turning efficiently. This meant, above all, keeping the populace dependent on the existing institutional framework for their survival. Confronted with the threat from an economy of abundance — the super-efficient, high-tech local economies of the “holons,” based on micromanufacturing and intensive agriculture — he reacted with total revulsion. He fought a total war, with death squad terror and scorched earth, to raze the holons to the ground and erase their existence from living memory, because of their subversive effect in demonstrating that people could live without authority.
Something like this was the thesis of “Goldstein’s Book,” in 1984. The industrial economies of the 20th century created the problem of abundance: a populace with enough leisure to remove their noses from the grindstone and start asking pointed questions about the age-old systems of authority they observed in their world. In order to maintain the power of the old ruling hierarchies — the kings and priests, the bureaucrats, the owners and employers — it was necessary to destroy the subversive threat of abundance, and to keep the general public poor and stupid. The beauty of perpetual war with Eurasia and Eastasia was that it enabled Oceania to blast unlimited amounts of economic output into the stratosphere or sink them to the bottom of the sea, and push everyone down to the margin of subsistence so they’d be too busy staying alive to ask all sorts of impertinent questions.
This problem — how to maintain the power of the old ruling hierarchies where there is no longer a material need for them — is a recurring theme in literature. It’s the subject of the satirical Report from Iron Mountain, a fictitious government document addressing the need for some moral equivalent of war to maintain public deference to the ruling and owning classes in the face of the subversive effects of world peace.
It’s the people at the top of the pile, not those at the bottom, who care most about inequality.
Poll: 65% Favor Getting Rid of Entire Congress and Starting Over
Thursday, October 28, 2010.
A new Rasmussen Reports national telephone survey finds that 65% of Likely U.S. Voters say if they had the option next week, they would vote to get rid of the entire Congress and start all over again. Only 20% would opt to keep the entire Congress instead. Fifteen percent (15%) aren’t sure. (To see survey question wording, click here.)
Of course, the Political Class strongly disagrees. While 84% of Mainstream voters would opt to get rid of the entire Congress, 64% of the Political Class would vote instead to keep them all.
Not surprisingly, 82% of Republicans and 78% of unaffiliateds say dump them all. Despite their party’s control of both the House and Senate, Democratic voters are fairly evenly divided: 44% say it’s better to keep the entire Congress, but 38% would prefer to give all the national legislators the heave-ho.
Thirty-eight percent (38%) of all voters have a favorable opinion of the Democratic Party after its two years of controlling both the White House and Congress. But 53% view the Democrats unfavorably.
As for the party out of power but knocking on the door, just 29% view Republicans favorably, while 54% hold an unfavorable opinion of them.
Only 61% of Republicans offer a favorable opinion of the GOP, a figure perhaps reflective of the fact that most Republican voters believe their party leaders are out of touch with the base.
Seventy-six percent (76%) of Democrats have a favorable opinion of their party.
Among all voters, just three percent (3%) have a favorable opinion of both parties, while 18% view both unfavorably. Seventy-nine percent (79%) offer mixed reviews.
(Want a free daily e-mail update? If it's in the news, it's in our polls). Rasmussen Reports updates are also available on Twitter or Facebook.
The survey of 1,000 Likely Voters was conducted on October 26-27, 2010 by Rasmussen Reports. The margin of sampling error is +/- 3 percentage points with a 95% level of confidence. Field work for all Rasmussen Reports surveys is conducted by Pulse Opinion Research, LLC. See methodology.
Twenty percent (20%) of voters nationwide now say they are members of the Tea Party, with another 10% who say they aren’t members but have friends or family members who are. Sixty-one percent (61%) say they have no ties to the grass roots movement. This is comparable to findings earlier in the month.
Perhaps it’s no surprise that 88% of Tea Party members would choose to dump the entire Congress, but 57% of non-members agree with them.
Ninety-one percent (91%) of Tea Party members view the Democratic Party unfavorably, but only 56% hold a favorable opinion of the GOP.
A majority of voters not affiliated with either major party have an unfavorable opinion of both Democrats and Republicans.
Just 12% of all voters nationwide now think Congress is doing a good or excellent job. Sixty-one percent (61%) rate their performance as poor.
The number of voters who view Speaker of the House Nancy Pelosi and Senate Majority Leader Harry Reid Very Unfavorably have reached their highest levels yet.
Sixty-two percent (62%) feel it would be better for the country if most congressional incumbents were defeated next week. Just 27% think their representative in Congress is the best possible person for the job, and only 37% think their local congressional representative deserves reelection.
Most voters think their representative in Congress does not deserve reelection if he or she voted for the national health care law, the auto bailouts or the $787-billion economic stimulus plan.
After all, 62% believe that no matter how bad things are, Congress can always make them worse.
Voters remain closely divided over whether a randomly selected sample of people from the phone book could do a better job than their elected representatives in Congress.
The no-compromise campaign
The no-compromise campaign
By: Andy Barr
October 28, 2010 08:09 AM EDT
If Republicans take the House as anticipated on Election Night, voters can expect to hear the customary talk about coming together with Democrats for the good of the country.
President Barack Obama inevitably will extend a hand across the aisle as well.
But that’s Tuesday. Right now, the tone is a lot different – with Republicans pledging to embrace an agenda for the next two years that sounds a lot like their agenda for the last two: Block Obama at all costs.
And even Obama’s pre-election appeals to cooperation are wrapped in an I’m-still-the-president tone that suggests that Americans will be looking at two opposing camps glaring at each other across the barricades — gridlock all around.
Here’s John Boehner, the likely speaker if Republicans take the House, offering his plans for Obama’s agenda:
“So I hope that my friends on the other side of the aisle are going to change their minds going forward, because putting the American people back to work, boosting our small businesses, rebuilding the economic security of the middle class, these are big national challenges. And we’ve all got a stake in solving them. And it’s not going to be enough just to play politics. You can’t just focus on the next election. You’ve got to focus on the next generation,” Obama said a recent event in Rhode Island.
It is popular to compare 2010 with 1994. Pundits point to a rejection of an overreaching Democratic president, a swing of moderate and independent voters to Republican ranks and a grass-roots groundswell that brings dozens of new faces to Washington.
But the second part of the prediction foresees that Obama will moderate his goals, Republicans will cool their tone and Washington will be able to responsibly address major issues.
Republicans are sounding like they’re not interested in that part.
To be sure, some of this is political trash-talk, each side trying to stoke up its partisans in the closing hours of the election. Republicans have premised much of their whole campaign on one idea – stop Obama – and it’s put them on the cusp of taking the House and scoring big gains in the Senate, so there’s no reason to quit now.
But veterans of the 1994 takeover are advising both Obama and the GOP to work together over the next two years, arguing that the strategy benefits both sides political and legislatively.
Former House Speaker Newt Gingrich advised Obama to consult with former President Bill Clinton on how to productively operate with Republicans. Gingrich led a budget fight that culminated in a government shutdown in 1995, but the two sides later were able to pass welfare reform legislation and other compromise measures.
“It was painful, it was difficult, and President Clinton did a tremendous job on working with us on balancing the budget and cutting taxes,” Gingrich said on CNN this week.
Obama “has an enormous opportunity to be in charge if he listens carefully to the American people and if he operates in the framework of what they want,” Gingrich added.
But if Obama’s listening to Republican leadership, he’d hear that he’s not wanted.
“To the extent the president wants to work with us, in terms of our goals, we'd welcome his involvement,” Boehner told Hannity.
“There will be no compromise on stopping runaway spending, deficits and debt. There will be no compromise on repealing Obamacare,” said Rep. Mike Pence (R-Ind.) in an interview last week on conservative Hugh Hewitt’s radio show.
“There will be no compromise on stopping Democrats from growing government and raising taxes,” added Pence, who may leave the House GOP leadership to prepare for a presidential run.
And many of the potential incoming Republicans have stated that they wouldn’t budge in trying to meet Democrats halfway.
“When it comes to spending, I'm not compromising. I don't care who, what, when or where, I'm not compromising,” Ken Buck, the Republican Senate nominee in Colorado, told The Washington Post.
The White House has indicated that it is willing to reach out the GOP following the election, though Republicans would contend that their track record suggests otherwise.
“I think we're open to speaking to the Republicans, if they really mean it, if they're talking about deficit reduction, if they're willing to move,” Vice President Joe Biden said recently.
Polls show that both parties would be wise to reach out.
A Bloomberg poll out Thursday shows that 80 percent of likely voters want to the two parties to work together over the next two years.
And a new New York Times/CBS News poll showed that 69 percent of the public wants to see Obama compromise with Republicans and 72 percent want congressional Democrats to work with Republicans.
Voters were split however when asked if they wanted to see Republicans work with Obama and congressional Democrats. Forty-six percent want to see Republicans work with Democrats, while 45 percent do not.
By: Andy Barr
October 28, 2010 08:09 AM EDT
If Republicans take the House as anticipated on Election Night, voters can expect to hear the customary talk about coming together with Democrats for the good of the country.
President Barack Obama inevitably will extend a hand across the aisle as well.
But that’s Tuesday. Right now, the tone is a lot different – with Republicans pledging to embrace an agenda for the next two years that sounds a lot like their agenda for the last two: Block Obama at all costs.
And even Obama’s pre-election appeals to cooperation are wrapped in an I’m-still-the-president tone that suggests that Americans will be looking at two opposing camps glaring at each other across the barricades — gridlock all around.
Here’s John Boehner, the likely speaker if Republicans take the House, offering his plans for Obama’s agenda:
“We're going to do everything — and I mean everything we can do — to kill it, stop it, slow it down, whatever we can.”Senate Minority Leader Mitch McConnell summed up his plan to National Journal:
“The single most important thing we want to achieve is for President Obama to be a one-term president.”Obama frequently reminds voters he believes all the delay in Washington this year is the Republicans’ fault.
“So I hope that my friends on the other side of the aisle are going to change their minds going forward, because putting the American people back to work, boosting our small businesses, rebuilding the economic security of the middle class, these are big national challenges. And we’ve all got a stake in solving them. And it’s not going to be enough just to play politics. You can’t just focus on the next election. You’ve got to focus on the next generation,” Obama said a recent event in Rhode Island.
It is popular to compare 2010 with 1994. Pundits point to a rejection of an overreaching Democratic president, a swing of moderate and independent voters to Republican ranks and a grass-roots groundswell that brings dozens of new faces to Washington.
But the second part of the prediction foresees that Obama will moderate his goals, Republicans will cool their tone and Washington will be able to responsibly address major issues.
Republicans are sounding like they’re not interested in that part.
To be sure, some of this is political trash-talk, each side trying to stoke up its partisans in the closing hours of the election. Republicans have premised much of their whole campaign on one idea – stop Obama – and it’s put them on the cusp of taking the House and scoring big gains in the Senate, so there’s no reason to quit now.
But veterans of the 1994 takeover are advising both Obama and the GOP to work together over the next two years, arguing that the strategy benefits both sides political and legislatively.
Former House Speaker Newt Gingrich advised Obama to consult with former President Bill Clinton on how to productively operate with Republicans. Gingrich led a budget fight that culminated in a government shutdown in 1995, but the two sides later were able to pass welfare reform legislation and other compromise measures.
“It was painful, it was difficult, and President Clinton did a tremendous job on working with us on balancing the budget and cutting taxes,” Gingrich said on CNN this week.
Obama “has an enormous opportunity to be in charge if he listens carefully to the American people and if he operates in the framework of what they want,” Gingrich added.
But if Obama’s listening to Republican leadership, he’d hear that he’s not wanted.
“To the extent the president wants to work with us, in terms of our goals, we'd welcome his involvement,” Boehner told Hannity.
“There will be no compromise on stopping runaway spending, deficits and debt. There will be no compromise on repealing Obamacare,” said Rep. Mike Pence (R-Ind.) in an interview last week on conservative Hugh Hewitt’s radio show.
“There will be no compromise on stopping Democrats from growing government and raising taxes,” added Pence, who may leave the House GOP leadership to prepare for a presidential run.
And many of the potential incoming Republicans have stated that they wouldn’t budge in trying to meet Democrats halfway.
“When it comes to spending, I'm not compromising. I don't care who, what, when or where, I'm not compromising,” Ken Buck, the Republican Senate nominee in Colorado, told The Washington Post.
The White House has indicated that it is willing to reach out the GOP following the election, though Republicans would contend that their track record suggests otherwise.
“I think we're open to speaking to the Republicans, if they really mean it, if they're talking about deficit reduction, if they're willing to move,” Vice President Joe Biden said recently.
Polls show that both parties would be wise to reach out.
A Bloomberg poll out Thursday shows that 80 percent of likely voters want to the two parties to work together over the next two years.
And a new New York Times/CBS News poll showed that 69 percent of the public wants to see Obama compromise with Republicans and 72 percent want congressional Democrats to work with Republicans.
Voters were split however when asked if they wanted to see Republicans work with Obama and congressional Democrats. Forty-six percent want to see Republicans work with Democrats, while 45 percent do not.
BP, Halliburton Knew Well Cement Was 'Unstable'
BP and Transocean, another partner, 'misinterpreted or chose not to conduct' key tests, it adds
by MSNBC and Agencies
Thursday, October 28, 2010 by MSNBC
BP and its cement contractor, Halliburton, knew weeks before the Deepwater Horizon explosion that the cement mixture they planned to use to seal the new well was unstable but still completed the work, staff for the presidential commission investigating the accident said in a letter Thursday.
That improper cement work "may have contributed to the blowout" on April 20 that killed 11 workers and led to the largest offshore oil spill in history, the staff stated in the first official finding of responsibility for the disaster.
Other factors have also been cited as possibly contributing to the explosion, among them a faulty blowout preventer and BP's decisions to use fewer stability rings on the well piping and seawater instead of heavier mud to plug the well until it was to be used for production.
The staff noted, however, that had the cement done its job it would "have prevented hydrocarbons from entering the well" and triggering the explosion.
The commission staff said that "Halliburton and BP both had results in March showing that a very similar foam slurry design to the one actually pumped at the Macondo well would be unstable, but neither acted upon that data."
Commission staff also cited Transocean, the owner of the drilling rig, as sharing some blame.
"The oil industry has developed tests, such as the negative pressure test and cement evaluation logs, to identify cementing failures" the team said, but "BP and/or Transocean personnel misinterpreted or chose not to conduct such tests at the Macondo well."
The letter also stated that independent testing of the type of cement used by Halliburton showed it was not stable.
"Halliburton (and perhaps BP) should have considered redesigning the foam slurry before pumping it at the Macondo well," the investigators added.
BP, as part of its own internal investigation, also conducted tests that showed the cement mix was flawed, but its analysis was criticized by Halliburton, which said it was not the correct formula.
By contrast, the commission obtained proprietary additives from Halliburton as well as a recipe to recreate the slurry that was used on the well.
A spokeswoman for Halliburton said the company was reviewing the findings and would have a response later Thursday. Halliburton has said tests showed the cement mix was stable.
The staff letter said the first three of four cement tests by Halliburton showed that it did not meet industry standards.
Two of those tests were conducted in February, and two more in April.
The staff said the results from one February test were sent to BP on March 8 "in a technical report along with other information. There is no indication that Halliburton highlighted to BP the significance of the foam stability data or that BP personnel raised any questions about it. There is no indication that Halliburton provided the data from the other February test to BP."
For the last test, the staff wrote, "Halliburton personnel again modified the testing procedure, and this time - for the first time - the data indicated the foam slurry design would be stable. We are not yet certain when Halliburton reported this data internally or whether the test was even complete prior to the time the cement job was poured at the Macondo well. Halliburton reported this data to BP after the blowout."
A BP spokesman had no immediate reaction.
by MSNBC and Agencies
Thursday, October 28, 2010 by MSNBC
BP and its cement contractor, Halliburton, knew weeks before the Deepwater Horizon explosion that the cement mixture they planned to use to seal the new well was unstable but still completed the work, staff for the presidential commission investigating the accident said in a letter Thursday.
That improper cement work "may have contributed to the blowout" on April 20 that killed 11 workers and led to the largest offshore oil spill in history, the staff stated in the first official finding of responsibility for the disaster.
Other factors have also been cited as possibly contributing to the explosion, among them a faulty blowout preventer and BP's decisions to use fewer stability rings on the well piping and seawater instead of heavier mud to plug the well until it was to be used for production.
The staff noted, however, that had the cement done its job it would "have prevented hydrocarbons from entering the well" and triggering the explosion.
The commission staff said that "Halliburton and BP both had results in March showing that a very similar foam slurry design to the one actually pumped at the Macondo well would be unstable, but neither acted upon that data."
Commission staff also cited Transocean, the owner of the drilling rig, as sharing some blame.
"The oil industry has developed tests, such as the negative pressure test and cement evaluation logs, to identify cementing failures" the team said, but "BP and/or Transocean personnel misinterpreted or chose not to conduct such tests at the Macondo well."
The letter also stated that independent testing of the type of cement used by Halliburton showed it was not stable.
"Halliburton (and perhaps BP) should have considered redesigning the foam slurry before pumping it at the Macondo well," the investigators added.
BP, as part of its own internal investigation, also conducted tests that showed the cement mix was flawed, but its analysis was criticized by Halliburton, which said it was not the correct formula.
By contrast, the commission obtained proprietary additives from Halliburton as well as a recipe to recreate the slurry that was used on the well.
A spokeswoman for Halliburton said the company was reviewing the findings and would have a response later Thursday. Halliburton has said tests showed the cement mix was stable.
The staff letter said the first three of four cement tests by Halliburton showed that it did not meet industry standards.
Two of those tests were conducted in February, and two more in April.
The staff said the results from one February test were sent to BP on March 8 "in a technical report along with other information. There is no indication that Halliburton highlighted to BP the significance of the foam stability data or that BP personnel raised any questions about it. There is no indication that Halliburton provided the data from the other February test to BP."
For the last test, the staff wrote, "Halliburton personnel again modified the testing procedure, and this time - for the first time - the data indicated the foam slurry design would be stable. We are not yet certain when Halliburton reported this data internally or whether the test was even complete prior to the time the cement job was poured at the Macondo well. Halliburton reported this data to BP after the blowout."
A BP spokesman had no immediate reaction.
Largest US Polluters Want EPA to Keep Their Emissions Secret from Public
Companies Want EPA to Keep Some Global Warming Information Secret in First-Ever Inventory
by Dina Cappiello - Thursday, October 28, 2010 by Associated Press
WASHINGTON — Some of America's largest emitters of heat-trapping gases, including businesses that publicly support efforts to curb global warming, don't want the public knowing exactly how much they pollute.
As the EPA prepares to regulate greenhouse gases, the data companies are being required to submit will help determine what limits eventually are put in place and whether they are working.
While gross estimates exist for such emissions from transportation and electricity production and manufacturing as a whole, the EPA is requiring companies for the first time to submit information for each individual facility.
The companies say that disclosing details beyond a facility's total emissions to the public would reveal company secrets by letting competitors know what happens inside their factories. More importantly, they argue, when it comes to understanding global warming, the public doesn't need to know anything more than what goes into the air.
"There is no need for the public to have information beyond what is entering the atmosphere," Steven H. Bernhardt, global director for regulatory affairs for Honeywell International Inc., said in comments filed with the agency earlier this year. The New Jersey-based company is a leading manufacturer of hydrofluorocarbons, a potent greenhouse gas used in a variety of consumer products. Honeywell wants the EPA to reconsider its proposal, which the company said would damage its business.
Other companies are pressing the agency to require a third party to verify the data, so they don't have to submit it at all, or to allow them to argue on a case-by-case basis to keep some of it confidential, a suggestion the EPA warned would delay public release.
The EPA says it's necessary to make the data public in order for the companies' calculations to be checked.
"It is important for outside groups and the public to have access to this information so they can essentially see and check EPA's and the company's math — giving the public greater confidence in the quality of data," the agency said in a statement.
The EPA required companies responsible for large amounts of heat-trapping pollution to begin this year collecting 1,500 pieces of information. The data, which is due to be reported by March, will be used in the first-ever inventory of greenhouse gases, a massive database that will reveal most sources of greenhouse gases in the United States.
Suppliers of fossil fuels, which when burned release greenhouse gases, plus manufacturers of engines and vehicles, and facilities that release 25,000 tons or more of any of six heat-trapping gases, all must comply with the regulation, the first by the government on pollution blamed for global warming.
Most companies don't have a problem telling the government or the public how much they pollute; they already do it for other types of pollution, such as toxic chemicals and sulfur dioxide, the gas that forms acid rain.
What they oppose — almost unanimously — is the public disclosure of the underlying data necessary to calculate the annual amount of greenhouse gases.
The EPA wouldn't need that information if companies actually measured greenhouse gas pollution at its source. But that equipment is expensive and for many companies would cost millions of dollars.
Even the Federal Trade Commission has weighed in, and asked the EPA to treat data used in emissions equations as confidential since it could lead to collusion among companies and raise prices for consumers.
Aluminum smelters want 11 of the 15 data fields the EPA intends to make public kept confidential, according to comments filed by the Aluminum Association.
Koch Nitrogen Co. LLC, a fertilizer producer, questions the EPA's desire to make unit-specific or facility-specific emissions available, calling it "misguided" since a change in pollution from a single factory is unlikely to influence policy on a global problem.
For DuPont, a founder of the U.S. Climate Action Partnership — a group of businesses that support controls on global warming pollution — the proposal has caused heartburn, according to Michael Parr, senior manager of government affairs. Many of the company's plants, including a titanium dioxide factory in Tennsylvania, release greenhouse gases when generating power.
"We actually lobbied for this reporting bill because we think it is a very good idea," Parr said in an interview. "What we are trying to get across is that if you take that information about how the plant runs and you make that available to the public it does not make the public any better informed about what is coming out of my plant. It exposes the fruits of all my innovation."
by Dina Cappiello - Thursday, October 28, 2010 by Associated Press
WASHINGTON — Some of America's largest emitters of heat-trapping gases, including businesses that publicly support efforts to curb global warming, don't want the public knowing exactly how much they pollute.
As the EPA prepares to regulate greenhouse gases, the data companies are being required to submit will help determine what limits eventually are put in place and whether they are working.
While gross estimates exist for such emissions from transportation and electricity production and manufacturing as a whole, the EPA is requiring companies for the first time to submit information for each individual facility.
The companies say that disclosing details beyond a facility's total emissions to the public would reveal company secrets by letting competitors know what happens inside their factories. More importantly, they argue, when it comes to understanding global warming, the public doesn't need to know anything more than what goes into the air.
"There is no need for the public to have information beyond what is entering the atmosphere," Steven H. Bernhardt, global director for regulatory affairs for Honeywell International Inc., said in comments filed with the agency earlier this year. The New Jersey-based company is a leading manufacturer of hydrofluorocarbons, a potent greenhouse gas used in a variety of consumer products. Honeywell wants the EPA to reconsider its proposal, which the company said would damage its business.
Other companies are pressing the agency to require a third party to verify the data, so they don't have to submit it at all, or to allow them to argue on a case-by-case basis to keep some of it confidential, a suggestion the EPA warned would delay public release.
The EPA says it's necessary to make the data public in order for the companies' calculations to be checked.
"It is important for outside groups and the public to have access to this information so they can essentially see and check EPA's and the company's math — giving the public greater confidence in the quality of data," the agency said in a statement.
The EPA required companies responsible for large amounts of heat-trapping pollution to begin this year collecting 1,500 pieces of information. The data, which is due to be reported by March, will be used in the first-ever inventory of greenhouse gases, a massive database that will reveal most sources of greenhouse gases in the United States.
Suppliers of fossil fuels, which when burned release greenhouse gases, plus manufacturers of engines and vehicles, and facilities that release 25,000 tons or more of any of six heat-trapping gases, all must comply with the regulation, the first by the government on pollution blamed for global warming.
Most companies don't have a problem telling the government or the public how much they pollute; they already do it for other types of pollution, such as toxic chemicals and sulfur dioxide, the gas that forms acid rain.
What they oppose — almost unanimously — is the public disclosure of the underlying data necessary to calculate the annual amount of greenhouse gases.
The EPA wouldn't need that information if companies actually measured greenhouse gas pollution at its source. But that equipment is expensive and for many companies would cost millions of dollars.
Even the Federal Trade Commission has weighed in, and asked the EPA to treat data used in emissions equations as confidential since it could lead to collusion among companies and raise prices for consumers.
Aluminum smelters want 11 of the 15 data fields the EPA intends to make public kept confidential, according to comments filed by the Aluminum Association.
Koch Nitrogen Co. LLC, a fertilizer producer, questions the EPA's desire to make unit-specific or facility-specific emissions available, calling it "misguided" since a change in pollution from a single factory is unlikely to influence policy on a global problem.
For DuPont, a founder of the U.S. Climate Action Partnership — a group of businesses that support controls on global warming pollution — the proposal has caused heartburn, according to Michael Parr, senior manager of government affairs. Many of the company's plants, including a titanium dioxide factory in Tennsylvania, release greenhouse gases when generating power.
"We actually lobbied for this reporting bill because we think it is a very good idea," Parr said in an interview. "What we are trying to get across is that if you take that information about how the plant runs and you make that available to the public it does not make the public any better informed about what is coming out of my plant. It exposes the fruits of all my innovation."
Make Rogue Corporations Pay for Foreclosure Crisis
by Ted Rall - Thursday, October 28, 2010 by CommonDreams.org
BOSTON--"We know how to prevent foreclosures," Federal Reserve Bank senior economist Paul Willen told The New York Times. "We just need to be prepared to spend the money." Willen "sees two possible solutions: Require banks to modify loans, basically imposing the cost on them; or pay banks to modify loans, imposing the cost on taxpayers."
Millions of American families have lost their homes to foreclosure since the global economy crashed in 2008. At this writing 4.4 million more households are in severe default on their mortgages--and that doesn't count the millions of renters who are getting evicted.
A few distressed homeowners are professional "flippers" who took out short-term adjustable-rate mortgages on dozens of houses at a time. When the housing bubble burst, their dream of easy profits using borrowed cash to turn a quick profit blew up too.
But that's a rare story. The overwhelming majority are people who got into trouble through no fault of their own. Most lost their job or suffered a medical catastrophe. They're victims of the usual boom-and-bust cycle of corporate capitalism.
Laissez-faire conservatives argue that that things will sort themselves out and that society will wind up stronger as the result of "creative destruction." But the scale of the post-2008 Depression is too big to sit on our hands. One out of four Americans face current or imminent joblessness. Poverty and homelessness are about to skyrocket.
Most frightening, there is no hope of economic improvement. Obama hasn't enacted a jobs program. There's no new technology waiting in the wings to spur economic growth, as the Internet did during the 1990s. The cavalry won't be foreign investment--the rest of the world is struggling too.
The social, political--and yes, economic--consequences of creating a new vast permanent underclass are terrifying to contemplate. Theft and random violence will rise. As we're seeing with the Tea Party, right-wing demagogues will gain power. People do bad things and listen to bad people when they're afraid. The U.S. could easily end up looking like Russia.
In 2009 the Obama Administration announced a new program, Make Home Affordable, to assist distressed homeowners. But--unsurprisingly, since it was voluntary and therefore toothless--MHA has been a bust. Fewer than 500,000 households have received modifications to their mortgages. As I can personally attest, banks like Citibank, Chase and Bank of America intentionally "lost" paperwork they requested so they could evict their customers and seize their homes as quickly as possible--frequently using fraudulent documents bearing forged signatures. FDIC chairperson Sheila Bair said: "We...know that in too many instances, servicers have not made meaningful efforts to restructure loans for borrowers who have documented that they are in economic distress."
That's for sure. When I lost my half my income in 2009, Chase Home Finance advised me that getting laid off had not adversely affected my financial status.
Millions of mortgages are going to need reduced interest rates and lower principal to reflect the new reality of the housing Markey. So who's going to pay?
It would be unfair to dun the taxpayers for the cost of loan modifications. First and foremost, many people rent. Why should people who can't afford the American Dream subsidize it for others?
Besides, the taxpayers already paid. The 2008 TARP bailout should have gone to the unemployed and homeowners facing foreclosure; when they paid their mortgages this would have wiped those "toxic assets" off the banks' books. Trickle-up economics works; trickle-down doesn't.
At bare minimum, banks that can't find the note to prove they own a home in foreclosure, and those who used fraudulent "robo-signers" to sign court documents, ought to lose their mortgages outright. In a tidy bit of justice, this would be fair punishment while allowing hundreds of thousands, possibly millions, of people to stay in their homes.
Next an investigation should be conducted of general bank malfeasance during the go-go '90s and '00s. Any bank that charged exorbitant interest rates on credit cards, ravaged debit card users with insane ATM fees, and failed to notify borrowers of the terms of their adjustable mortgages, should similarly face the only sanction they might remember the next time they're tempted to behave indecently: all their mortgages and credit card debt lines ought to be wiped clean.
BOSTON--"We know how to prevent foreclosures," Federal Reserve Bank senior economist Paul Willen told The New York Times. "We just need to be prepared to spend the money." Willen "sees two possible solutions: Require banks to modify loans, basically imposing the cost on them; or pay banks to modify loans, imposing the cost on taxpayers."
Millions of American families have lost their homes to foreclosure since the global economy crashed in 2008. At this writing 4.4 million more households are in severe default on their mortgages--and that doesn't count the millions of renters who are getting evicted.
A few distressed homeowners are professional "flippers" who took out short-term adjustable-rate mortgages on dozens of houses at a time. When the housing bubble burst, their dream of easy profits using borrowed cash to turn a quick profit blew up too.
But that's a rare story. The overwhelming majority are people who got into trouble through no fault of their own. Most lost their job or suffered a medical catastrophe. They're victims of the usual boom-and-bust cycle of corporate capitalism.
Laissez-faire conservatives argue that that things will sort themselves out and that society will wind up stronger as the result of "creative destruction." But the scale of the post-2008 Depression is too big to sit on our hands. One out of four Americans face current or imminent joblessness. Poverty and homelessness are about to skyrocket.
Most frightening, there is no hope of economic improvement. Obama hasn't enacted a jobs program. There's no new technology waiting in the wings to spur economic growth, as the Internet did during the 1990s. The cavalry won't be foreign investment--the rest of the world is struggling too.
The social, political--and yes, economic--consequences of creating a new vast permanent underclass are terrifying to contemplate. Theft and random violence will rise. As we're seeing with the Tea Party, right-wing demagogues will gain power. People do bad things and listen to bad people when they're afraid. The U.S. could easily end up looking like Russia.
In 2009 the Obama Administration announced a new program, Make Home Affordable, to assist distressed homeowners. But--unsurprisingly, since it was voluntary and therefore toothless--MHA has been a bust. Fewer than 500,000 households have received modifications to their mortgages. As I can personally attest, banks like Citibank, Chase and Bank of America intentionally "lost" paperwork they requested so they could evict their customers and seize their homes as quickly as possible--frequently using fraudulent documents bearing forged signatures. FDIC chairperson Sheila Bair said: "We...know that in too many instances, servicers have not made meaningful efforts to restructure loans for borrowers who have documented that they are in economic distress."
That's for sure. When I lost my half my income in 2009, Chase Home Finance advised me that getting laid off had not adversely affected my financial status.
Millions of mortgages are going to need reduced interest rates and lower principal to reflect the new reality of the housing Markey. So who's going to pay?
It would be unfair to dun the taxpayers for the cost of loan modifications. First and foremost, many people rent. Why should people who can't afford the American Dream subsidize it for others?
Besides, the taxpayers already paid. The 2008 TARP bailout should have gone to the unemployed and homeowners facing foreclosure; when they paid their mortgages this would have wiped those "toxic assets" off the banks' books. Trickle-up economics works; trickle-down doesn't.
At bare minimum, banks that can't find the note to prove they own a home in foreclosure, and those who used fraudulent "robo-signers" to sign court documents, ought to lose their mortgages outright. In a tidy bit of justice, this would be fair punishment while allowing hundreds of thousands, possibly millions, of people to stay in their homes.
Next an investigation should be conducted of general bank malfeasance during the go-go '90s and '00s. Any bank that charged exorbitant interest rates on credit cards, ravaged debit card users with insane ATM fees, and failed to notify borrowers of the terms of their adjustable mortgages, should similarly face the only sanction they might remember the next time they're tempted to behave indecently: all their mortgages and credit card debt lines ought to be wiped clean.
America's Jobs Losses are Permanent
Globalism Comes Home to Roost
By PAUL CRAIG ROBERTS
Now that a few Democrats and the remnants of the AFL-CIO are waking up to the destructive impact of jobs offshoring on the US economy and millions of American lives, globalism’s advocates have resurrected Dartmouth economist Matthew Slaughter’s discredited finding of several years ago that jobs offshoring by US corporations increases employment and wages in the US.
At the time I exposed Slaughter’s mistakes, but economists dependent on corporate largess understood that it was more profitable to drink Slaughter’s kool-aid than to tell the truth. Recently the US Chamber of Commerce rolled out Slaughter’s false argument as a weapon against House Democrats Sandy Levin and Tim Ryan, and the Wall Street Journal had Bill Clinton’s Defense Secretary, William S. Cohen, regurgitate Slaughter’s claim on its op-ed page on October 12.
I sent a letter to the Wall Street Journal, but the editors were not interested in what a former associate editor and columnist for the paper and President Reagan’s Assistant Secretary of the Treasury for Economic Policy had to say. The facade of lies has to be maintained at all costs. There can be no questioning that globalism is good for us.
Cohen told the Journal’s readers that “the fact is that for every job outsourced to Bangalore, nearly two jobs are created in Buffalo and other American cities.” I bet Buffalo “and other American cities” would like to know where these jobs are. Maybe Slaughter, Cohen, and the Chamber of Commerce can tell them.
Last May I was in St. Louis and was struck by block after block of deserted and boarded up homes, deserted factories and office buildings, even vacant downtown storefronts.
Detroit is trying to shrink itself by 40 square miles. On October 25, 60 Minutes had a program on unemployment in Silicon Valley, where formerly high-earning professionals have been out of work for two years and today cannot even find part-time $9 an hour jobs at Target.
The claim that jobs offshoring by US corporations increases domestic employment in the US is one of the greatest hoaxes ever perpetrated. As I demonstrated in my syndicated column at the time and again in my book, How The Economy Was Lost (2010), Slaughter reached his erroneous conclusion by counting the growth in multinational jobs in the U.S. without adjusting the data to reflect the acquisition of existing firms by multinationals and for existing firms turning themselves into multinationals by establishing foreign operations for the first time. There was no new multinational employment in the U.S. Existing employment simply moved into the multinational category from a change in the status of firms to multinational.
If Slaughter (or Cohen) had consulted the Bureau of Labor Statistics nonfarm payroll jobs data, he would have been unable to locate the 5.5 million jobs that were allegedly created. In my columns I have reported for about a decade the details of new jobs creation in the U.S. as revealed by the BLS data, as has Washington economist Charles McMillion. Over the last decade, the net new jobs created in the U.S. have nothing to do with multinational corporations. The jobs consist of waitresses and bartenders, health care and social services (largely ambulatory health care), retail clerks, and while the bubble lasted, construction.
These are not the high-tech, high-paying jobs that the “New Economy” promised, and they are not jobs that can be associated with global corporations. Moreover, these domestic service jobs are themselves scarce.
But facts have nothing to do with it. Did Slaughter, Cohen, the Chamber, and the Wall Street Journal ever wonder how it was possible to have simultaneously millions of new good-paying middle class jobs and virtually the worst income inequality in the developed world with all income gains accruing to the mega-rich?
In mid-October Treasury Secretary and Goldman Sachs puppet Tim Geithner gave a speech in California in the backyard, or former backyard, of 60 Minutes’ Silicon Valley dispossessed upper middle class interviewees in which Geithner said that the solution is to “educate more engineers.”
We already have more engineers than we have jobs for them. In a recent poll a Philadelphia marketing and research firm, Twentysomething, found that 85% of recent college graduates planned to move back home with parents. Even if members of the “boomeranger generation” find jobs, the jobs don’t pay enough to support an independent existence.
The financial media is useless. Reporters repeat the lie that the unemployment rate is 9.6%. This is a specially concocted unemployment rate that does not count most of the unemployed. The government’s own more inclusive rate stands at 17%. Statistician John Williams, who counts unemployment the way it is supposed to be counted, finds the unemployment rate to be 22%.
The financial press turns bad news into good news. Recently a monthly gain of 64,000 new private sector jobs was hyped, jobs that were more than offset by the loss in government jobs. Moreover, it takes around 150,000 new jobs each month to keep pace with labor force growth. In other words, 100,000 new jobs each month would be a 50,000 jobs deficit.
The idiocy of the financial press is demonstrated by the following two headlines which appeared on October 19 on the same Bloomberg page:
In other words, the problem is China and the greedy American poor who tried to live above their means. With this being the American mindset, you can see why nothing can be done to save the economy.
No government will admit its mistakes, especially when it can blame foreigners. China is being made the scapegoat for American failure. An entire industry has grown up that points its finger at China and away from 20 years of corporate offshoring of US jobs and 9 years of expensive and pointless US wars.
“Currency manipulation” is the charge. However, the purpose of the Chinese peg to the US dollar is not currency manipulation. When the Chinese government decided to take its broken communist economy into a market economy, the government understood that it needed foreign confidence in its currency. It achieved that by pegging its currency to the dollar, signaling that China’s money was as sound as the US dollar. At that time, China, of course, could not credibly give its currency a higher dollar value.
As time has passed, the irresponsible and foolish policies of the US have eroded the dollar’s value, and as the Chinese currency is pegged to the dollar, its value has moved down with the dollar. The Chinese have not manipulated the peg in order to make their currency less valuable.
To the contrary, when I was in China in 2006, the exchange rate was a little more than 8 yuan to the dollar. Today it is 6.6 yuan to the dollar--a 17.5% revaluation of the yuan.
The US government blames the US trade deficit with China on an undervalued Chinese currency. However, the Chinese currency has risen 17.5% against the dollar since 2006, but the US trade deficit with China has not declined.
The major cause of the US trade deficit with China is “globalism” or the practice, enforced by Wall Street and Wal-Mart, of US corporations offshoring their production for US markets to China in order to improve the bottom line by lowering labor costs. Most of the tariffs that the congressional idiots want to put on “Chinese” imports would, therefore, fall on the offshored production of US corporations. When these American brand goods, such as Apple computers, are brought to US markets, they enter the US as imports. Thus, the tariffs will be applied to US corporate offshored output as well as to the exports of Chinese companies to the US.
The correct conclusion is that the US trade deficit with China is the result of “globalism” or jobs offshoring, not Chinese currency manipulation.
An important point always overlooked is that the US is dependent on China for many manufactured products including high technology products that are no longerproduced in the US. Revaluation of the Chinese currency would raise the dollar price of these products in the US. The greater the revaluation, the greater the price rise. The impact on already declining US living standards would be dramatic.
When US policymakers argue that the solution to America’s problems is a stronger Chinese currency, they are yet again putting the burden of adjustment on the out-of-work, indebted, and foreclosed American population.
By PAUL CRAIG ROBERTS
Now that a few Democrats and the remnants of the AFL-CIO are waking up to the destructive impact of jobs offshoring on the US economy and millions of American lives, globalism’s advocates have resurrected Dartmouth economist Matthew Slaughter’s discredited finding of several years ago that jobs offshoring by US corporations increases employment and wages in the US.
At the time I exposed Slaughter’s mistakes, but economists dependent on corporate largess understood that it was more profitable to drink Slaughter’s kool-aid than to tell the truth. Recently the US Chamber of Commerce rolled out Slaughter’s false argument as a weapon against House Democrats Sandy Levin and Tim Ryan, and the Wall Street Journal had Bill Clinton’s Defense Secretary, William S. Cohen, regurgitate Slaughter’s claim on its op-ed page on October 12.
I sent a letter to the Wall Street Journal, but the editors were not interested in what a former associate editor and columnist for the paper and President Reagan’s Assistant Secretary of the Treasury for Economic Policy had to say. The facade of lies has to be maintained at all costs. There can be no questioning that globalism is good for us.
Cohen told the Journal’s readers that “the fact is that for every job outsourced to Bangalore, nearly two jobs are created in Buffalo and other American cities.” I bet Buffalo “and other American cities” would like to know where these jobs are. Maybe Slaughter, Cohen, and the Chamber of Commerce can tell them.
Last May I was in St. Louis and was struck by block after block of deserted and boarded up homes, deserted factories and office buildings, even vacant downtown storefronts.
Detroit is trying to shrink itself by 40 square miles. On October 25, 60 Minutes had a program on unemployment in Silicon Valley, where formerly high-earning professionals have been out of work for two years and today cannot even find part-time $9 an hour jobs at Target.
The claim that jobs offshoring by US corporations increases domestic employment in the US is one of the greatest hoaxes ever perpetrated. As I demonstrated in my syndicated column at the time and again in my book, How The Economy Was Lost (2010), Slaughter reached his erroneous conclusion by counting the growth in multinational jobs in the U.S. without adjusting the data to reflect the acquisition of existing firms by multinationals and for existing firms turning themselves into multinationals by establishing foreign operations for the first time. There was no new multinational employment in the U.S. Existing employment simply moved into the multinational category from a change in the status of firms to multinational.
If Slaughter (or Cohen) had consulted the Bureau of Labor Statistics nonfarm payroll jobs data, he would have been unable to locate the 5.5 million jobs that were allegedly created. In my columns I have reported for about a decade the details of new jobs creation in the U.S. as revealed by the BLS data, as has Washington economist Charles McMillion. Over the last decade, the net new jobs created in the U.S. have nothing to do with multinational corporations. The jobs consist of waitresses and bartenders, health care and social services (largely ambulatory health care), retail clerks, and while the bubble lasted, construction.
These are not the high-tech, high-paying jobs that the “New Economy” promised, and they are not jobs that can be associated with global corporations. Moreover, these domestic service jobs are themselves scarce.
But facts have nothing to do with it. Did Slaughter, Cohen, the Chamber, and the Wall Street Journal ever wonder how it was possible to have simultaneously millions of new good-paying middle class jobs and virtually the worst income inequality in the developed world with all income gains accruing to the mega-rich?
In mid-October Treasury Secretary and Goldman Sachs puppet Tim Geithner gave a speech in California in the backyard, or former backyard, of 60 Minutes’ Silicon Valley dispossessed upper middle class interviewees in which Geithner said that the solution is to “educate more engineers.”
We already have more engineers than we have jobs for them. In a recent poll a Philadelphia marketing and research firm, Twentysomething, found that 85% of recent college graduates planned to move back home with parents. Even if members of the “boomeranger generation” find jobs, the jobs don’t pay enough to support an independent existence.
The financial media is useless. Reporters repeat the lie that the unemployment rate is 9.6%. This is a specially concocted unemployment rate that does not count most of the unemployed. The government’s own more inclusive rate stands at 17%. Statistician John Williams, who counts unemployment the way it is supposed to be counted, finds the unemployment rate to be 22%.
The financial press turns bad news into good news. Recently a monthly gain of 64,000 new private sector jobs was hyped, jobs that were more than offset by the loss in government jobs. Moreover, it takes around 150,000 new jobs each month to keep pace with labor force growth. In other words, 100,000 new jobs each month would be a 50,000 jobs deficit.
The idiocy of the financial press is demonstrated by the following two headlines which appeared on October 19 on the same Bloomberg page:
“Dollar Index Appreciates as Geithner Supports Currency Strength”
“Geithner Weak Dollar Seen as U.S. Recovery Route”To keep eyes off of the loss of jobs to offshoring, policymakers and their minions in the financial press blame US unemployment on alleged currency manipulation by China and on the financial crisis. The financial crisis itself is blamed by Republicans on low income Americans who took out mortgages that they could not afford.
In other words, the problem is China and the greedy American poor who tried to live above their means. With this being the American mindset, you can see why nothing can be done to save the economy.
No government will admit its mistakes, especially when it can blame foreigners. China is being made the scapegoat for American failure. An entire industry has grown up that points its finger at China and away from 20 years of corporate offshoring of US jobs and 9 years of expensive and pointless US wars.
“Currency manipulation” is the charge. However, the purpose of the Chinese peg to the US dollar is not currency manipulation. When the Chinese government decided to take its broken communist economy into a market economy, the government understood that it needed foreign confidence in its currency. It achieved that by pegging its currency to the dollar, signaling that China’s money was as sound as the US dollar. At that time, China, of course, could not credibly give its currency a higher dollar value.
As time has passed, the irresponsible and foolish policies of the US have eroded the dollar’s value, and as the Chinese currency is pegged to the dollar, its value has moved down with the dollar. The Chinese have not manipulated the peg in order to make their currency less valuable.
To the contrary, when I was in China in 2006, the exchange rate was a little more than 8 yuan to the dollar. Today it is 6.6 yuan to the dollar--a 17.5% revaluation of the yuan.
The US government blames the US trade deficit with China on an undervalued Chinese currency. However, the Chinese currency has risen 17.5% against the dollar since 2006, but the US trade deficit with China has not declined.
The major cause of the US trade deficit with China is “globalism” or the practice, enforced by Wall Street and Wal-Mart, of US corporations offshoring their production for US markets to China in order to improve the bottom line by lowering labor costs. Most of the tariffs that the congressional idiots want to put on “Chinese” imports would, therefore, fall on the offshored production of US corporations. When these American brand goods, such as Apple computers, are brought to US markets, they enter the US as imports. Thus, the tariffs will be applied to US corporate offshored output as well as to the exports of Chinese companies to the US.
The correct conclusion is that the US trade deficit with China is the result of “globalism” or jobs offshoring, not Chinese currency manipulation.
An important point always overlooked is that the US is dependent on China for many manufactured products including high technology products that are no longerproduced in the US. Revaluation of the Chinese currency would raise the dollar price of these products in the US. The greater the revaluation, the greater the price rise. The impact on already declining US living standards would be dramatic.
When US policymakers argue that the solution to America’s problems is a stronger Chinese currency, they are yet again putting the burden of adjustment on the out-of-work, indebted, and foreclosed American population.
Keeping science out of politics
The new barbarism
Climate skeptics reach a new low. Their goal: Don't let scientists influence policy, period.
By Andrew Leonard - Wednesday, Oct 27, 2010
Joe Romm, climate activist extraordinaire, is upset at Scientific American for featuring a dumb online poll on global warming.
Online polls are notoriously amenable to manipulation, and it seems pretty clear that climate skeptics organized in force to skew the results. Like Romm, I have a hard time believing that anything close to 56.1 percent of Scientific American readers believe that the Intergovernmental Panel on Climate Change is "a corrupt organization, prone to groupthink, with a political agenda."
But even if you grant that the poll was the victim of an organized attack, I'm still amazed by what we can learn from it. In response to the question "Which policy options do you support?" 42 percent of the respondents chose the answer "keeping science out of the political process."
Say what?
Keep science out of the political process? Science? I thought it was supposed to be the other way around; that the goal was to keep politics out of science. I can understand, albeit disagree with, categorizations of anthropogenic global warming as bad science, but I'm afraid I just can't come to grips with the notion that we should keep "science" from influencing politics at all. What is the point of civilization in the first place if we don't use our hard-won understanding of how the universe works to influence our decisions on how to organize ourselves?
Watching one Republican candidate for office after another declare outright that they do not believe humans are causing climate change is befuddling enough. But to flat-out reject science as a guide to policy is beyond medieval. It's a retreat to pure superstition, a surrender to barbarism. We might as well be reading omens in the entrails of sacrificial animals. Our wealth as a country, our incredible technological wonders -- the Industrial Revolution! -- were built upon scientific discovery.
Should the FDA reject clinical test results in deciding whether to approve a drug? Should the U.S. Corp of Engineers ignore physics when building dams and levees? Scientists say asbestos is dangerous to human health and cigarette smoking causes cancer. Who cares? Let's continue to build public schools packed with the fire-retardant material and give free Camel nonfilters to teenagers!
We need more science in the political process, not less. The countries that understand that will thrive and prosper. The ones that don't will undoubtedly fail, if they haven't already doomed themselves.
Climate skeptics reach a new low. Their goal: Don't let scientists influence policy, period.
By Andrew Leonard - Wednesday, Oct 27, 2010
Joe Romm, climate activist extraordinaire, is upset at Scientific American for featuring a dumb online poll on global warming.
Online polls are notoriously amenable to manipulation, and it seems pretty clear that climate skeptics organized in force to skew the results. Like Romm, I have a hard time believing that anything close to 56.1 percent of Scientific American readers believe that the Intergovernmental Panel on Climate Change is "a corrupt organization, prone to groupthink, with a political agenda."
But even if you grant that the poll was the victim of an organized attack, I'm still amazed by what we can learn from it. In response to the question "Which policy options do you support?" 42 percent of the respondents chose the answer "keeping science out of the political process."
Say what?
Keep science out of the political process? Science? I thought it was supposed to be the other way around; that the goal was to keep politics out of science. I can understand, albeit disagree with, categorizations of anthropogenic global warming as bad science, but I'm afraid I just can't come to grips with the notion that we should keep "science" from influencing politics at all. What is the point of civilization in the first place if we don't use our hard-won understanding of how the universe works to influence our decisions on how to organize ourselves?
Watching one Republican candidate for office after another declare outright that they do not believe humans are causing climate change is befuddling enough. But to flat-out reject science as a guide to policy is beyond medieval. It's a retreat to pure superstition, a surrender to barbarism. We might as well be reading omens in the entrails of sacrificial animals. Our wealth as a country, our incredible technological wonders -- the Industrial Revolution! -- were built upon scientific discovery.
Should the FDA reject clinical test results in deciding whether to approve a drug? Should the U.S. Corp of Engineers ignore physics when building dams and levees? Scientists say asbestos is dangerous to human health and cigarette smoking causes cancer. Who cares? Let's continue to build public schools packed with the fire-retardant material and give free Camel nonfilters to teenagers!
We need more science in the political process, not less. The countries that understand that will thrive and prosper. The ones that don't will undoubtedly fail, if they haven't already doomed themselves.
Research proves 'gender-bending' chemicals affect reproduction
Published on 10-27-2010 - Source: Physorg
New research has provided the first evidence that 'gender bending' chemicals which find their way from human products into rivers and oceans can have a significant impact on the ability of fish to breed in UK Rivers.
The findings from the four year study, led by the universities of Exeter and Brunel, has important implications for understanding the impacts of these chemicals on ecosystem health and possibly on humans.
Endocrine disrupting chemicals (EDCs) disrupt the ways that hormones work in the bodies of vertebrates (animals with backbones), including humans.
They can be found in everything from plastic containers, female contraceptive drugs and hormone replacement therapy pills, to washing up liquid, with the most well studied EDCs being those that mimic oestrogen (female hormone).
EDCs have been seeping into rivers through the sewage system for decades and have an observed effect on fish, altering male biology to make them more female – hence the 'gender bending' reputation of these chemicals.
Until now, there has been no solid evidence to show the long-term impact of this effect on fish in the wild - but the new research focusing on wild roach in two UK rivers (Bourne and Arun) has provided new evidence.
Two large-scale breeding studies assessed the ability of fish to breed by using a genetic technique (DNA microsatellites) to match offspring produced to their parents.
It was found that intersex fish – those that had their sexuality compromised by EDCs and which contain both male (sperm) and female (eggs) sex cells – had their reproductive performance reduced by up to 76%.
Charles Tyler, from the University of Exeter's Biosciences department, jointly led the research alongside Professor John Sumpter, from the Institute of Environment at Brunel University.
Prof Tyler said:
Their biology also means they are particularly prone to the feminising effects of EDCs because their sex is not decided until after birth – meaning they are more susceptible to outside influence.
Prof Tyler concluded:
More information: The full paper, called Consequences of Femininisation in Breeding Groups of Wild Fish, is published in Environmental Health Perspectives online.
New research has provided the first evidence that 'gender bending' chemicals which find their way from human products into rivers and oceans can have a significant impact on the ability of fish to breed in UK Rivers.
The findings from the four year study, led by the universities of Exeter and Brunel, has important implications for understanding the impacts of these chemicals on ecosystem health and possibly on humans.
Endocrine disrupting chemicals (EDCs) disrupt the ways that hormones work in the bodies of vertebrates (animals with backbones), including humans.
They can be found in everything from plastic containers, female contraceptive drugs and hormone replacement therapy pills, to washing up liquid, with the most well studied EDCs being those that mimic oestrogen (female hormone).
EDCs have been seeping into rivers through the sewage system for decades and have an observed effect on fish, altering male biology to make them more female – hence the 'gender bending' reputation of these chemicals.
Until now, there has been no solid evidence to show the long-term impact of this effect on fish in the wild - but the new research focusing on wild roach in two UK rivers (Bourne and Arun) has provided new evidence.
Two large-scale breeding studies assessed the ability of fish to breed by using a genetic technique (DNA microsatellites) to match offspring produced to their parents.
It was found that intersex fish – those that had their sexuality compromised by EDCs and which contain both male (sperm) and female (eggs) sex cells – had their reproductive performance reduced by up to 76%.
Charles Tyler, from the University of Exeter's Biosciences department, jointly led the research alongside Professor John Sumpter, from the Institute of Environment at Brunel University.
Prof Tyler said:
"This is the first time we've seen firm evidence that the intersex fish, males that have been feminised by EDCs, have a reduced ability to breed.Fish are seen as a key indicator of the impacts of chemicals such as EDCs because they soak them up in far larger quantities than humans ever would, concentrating any potential side-effects.
"Clearly this raises concerns about the implications on the future for wild fish populations living in UK rivers, but there's also much wider issues raised by these findings. Some of the effects seen in fish could occur in other animals too as hormone systems are quite similar across all vertebrates.
"EDCs have been tentatively linked with human health impacts too, including, falling sperm counts and cardio-vascular disease. These findings remain more controversial. In contrast, we have shown, unequivocally that environmental oestrogens alter sexual development in fish and now, through this study, that this can impact on their ability to breed".
Their biology also means they are particularly prone to the feminising effects of EDCs because their sex is not decided until after birth – meaning they are more susceptible to outside influence.
Prof Tyler concluded:
"Fish still share many biological links with humans and the fact that their reproduction has the potential to be affected by EDCs is certainly a cause for concern. From a risk assessment point of view, these results are very significant."
More information: The full paper, called Consequences of Femininisation in Breeding Groups of Wild Fish, is published in Environmental Health Perspectives online.
Amidst record unemployment, US companies hoard $1 trillion of cash
(Knowing this, why should employees ever be loyal to their employers after this level of betrayal? Corporate America is evil and serves only the interests of the very rich. It should be destroyed and rebuilt into a system that favors the people.--jef)
Amidst record unemployment, US companies hoard $1 trillion of cash
By Reuters - Wednesday, October 27th, 2010
NEW YORK (Reuters) - U.S. companies are hoarding almost $1 trillion in cash but are unlikely to spend on expanding their business and hiring new employees due to continuing uncertainty about the strength of the economy, Moody's Investors Service said on Tuesday.
As the economy stabilizes companies are also more likely to spend on share repurchases and mergers and acquisitions, Moody's added.
Companies cut costs, reduced investment in plants and equipment and downsized operations in order to boost cash holdings during the recession. As the corporate bond market reopened many companies also boosted cash levels by selling debt and refinancing near-term debt maturities.
The US unemployment rate, meanwhile, sits at a whopping 9.2 percent. (A graph of the unemployment rates state by state can be found here).
Nonfinancial U.S. companies are sitting on $943 billion of cash and short-term investments, as of mid-year 2010, compared with $775 billion at the end of 2008, Moody's said. This would be enough to cover a year's worth of capital spending and dividends and still have $121 billion left over, it said.
However, "we believe companies are looking for greater certainty about the economy and signs of a permanent increase in sales before they let go of their cash hoards, which they suffered so much to build," Moody's said in a report.
"Given low demand and capacity utilization within certain industries, companies are wary of investing their cash in new capacity and adding workers, thereby doing little to abbreviate the jobless recovery," it added.
Around one quarter of the cash is held overseas and is unlikely to be repatriated to the United States, Moody's said.
Meanwhile only 20 companies hold a large portion of corporate cash balances, with $346 billion on their balance sheets, or 37 percent of the total, Moody's said.
Cisco Systems has the largest cash balance, at $39.86 billion, while Microsoft is second with $36.79 billion, Moody's said. Google has the third-largest balance with $30.06 billion, followed by Oracle with $23.64 billion and Ford Motor Co at $21.89 billion.
Technology companies held the most cash as a sector, at $207 billion, followed by pharmaceuticals with $124 billion, energy at $105 billion, and consumer products with $101 billion, Moody's said.
Offshoring Jobs is the Reason Ford Is Making Record Profits
Michael Snyder | Oct. 27, 2010
On Tuesday, Ford Motor Company reported a record breaking profit for the third quarter. Ford earned 1.7 billion dollars during the quarter, which was way up from a profit of $997 million a year ago during the same time period. Ford CEO Alan Mulally is being hailed as a miracle worker, and investors are giddy about the future of the company.
So is all of this success by Ford translating into good jobs for American workers? No.
As described in a recent article on MSNBC, Mulally has been "revamping Ford’s U.S. and global manufacturing operation to be cheaper, more efficient and more flexible". In other words, Mulally has been getting rid of American workers in droves.
Since Mulally took over as CEO, Ford has slashed its North American work force by nearly half. Ford has shut down or plans to shut down a dozen U.S. manufacturing facilities. Today, only about 40 percent of Ford's 178,000 workers are employed in North America, and a lot of those jobs are in Canada and Mexico.
In fact, the number of Ford cars produced in Mexico continues to grow rapidly. The truth is that this is yet another example that proves that what is good for Wall Street is not necessarily good for average American workers.
Today, the average Mexican auto worker makes less than a tenth of what a U.S. auto worker makes in total compensation. In the new global economy, good jobs are going to where the labor is the cheapest, and that means going away from American workers.
Even the unionized workers that remained at the manufacturing facilities that Ford kept open were forced to agree to very substantial concessions to their labor contracts just to keep their jobs.
Meanwhile, literally hundreds of Ford dealerships have been shut down from coast to coast. All of this "dealership downsizing" has also come at a very high price - thousands of good American jobs.
So should we be celebrating record profits at Ford?
Not really.
The truth is that in the pursuit of profits, Ford has devastated quite a few local communities.
For example, Ford recently announced the closure of a facility that produces the Ford Ranger in St. Paul, Minnesota.
Closing that plant eliminates 750 U.S. jobs.
But don't people still want to buy Ford Rangers?
Yes, of course Ford Rangers are still quite popular, and Minnesota desperately wanted to keep that factory open.
In fact, Minnesota Governor Tim Pawlenty offered Ford a very generous multi-million dollar incentive package full of tax cuts and job creation incentives to keep the factory open.
But it didn't work.
Ford closed the factory anyway.
So where are all of those Ford Rangers going to be manufactured now?
Well, the statement about the plant closing issued by Ford did not reveal that tidbit, but it did offer some clues....
"Ford continues to concentrate on implementing the plan we initiated four years ago to streamline our plant operations and better leverage our global platforms. At this time, the Twin Cities Assembly Plant does not fit into our global manufacturing strategy."
When you see big corporations like Ford use the word "global", what it really means is some place other than America.
So don't be too quick to applaud Ford for record breaking profits.
The truth is that if current trends continue, we are going to end up with literally tens of millions of unemployed American workers.
We are shipping factories, jobs and wealth overseas so rapidly that it is hard to even comprehend what is going on.
In 1985, the U.S. trade deficit with China was 6 million dollars for the entire year. In the month of August alone, the U.S. trade deficit with China was over 28 billion dollars.
Just think about that for a minute.
World trade has been completely and totally revolutionized over the past 25 years, and America is losing.
The United States has lost approximately 42,400 factories since 2001.
So how many more are we going to lose before our "leaders" do something about it?
As of the end of 2009, less than 12 million Americans worked in manufacturing. The last time less than 12 million Americans were employed in manufacturing was in 1941.
The sad truth is that the United States is being deindustrialized. The big global corporations have figured out that they don't really need American workers anymore, and that is really, really bad news for the American middle class.
Without good paying jobs, the future of the middle class is incredibly bleak.
On Tuesday, Ford Motor Company reported a record breaking profit for the third quarter. Ford earned 1.7 billion dollars during the quarter, which was way up from a profit of $997 million a year ago during the same time period. Ford CEO Alan Mulally is being hailed as a miracle worker, and investors are giddy about the future of the company.
So is all of this success by Ford translating into good jobs for American workers? No.
As described in a recent article on MSNBC, Mulally has been "revamping Ford’s U.S. and global manufacturing operation to be cheaper, more efficient and more flexible". In other words, Mulally has been getting rid of American workers in droves.
Since Mulally took over as CEO, Ford has slashed its North American work force by nearly half. Ford has shut down or plans to shut down a dozen U.S. manufacturing facilities. Today, only about 40 percent of Ford's 178,000 workers are employed in North America, and a lot of those jobs are in Canada and Mexico.
In fact, the number of Ford cars produced in Mexico continues to grow rapidly. The truth is that this is yet another example that proves that what is good for Wall Street is not necessarily good for average American workers.
Today, the average Mexican auto worker makes less than a tenth of what a U.S. auto worker makes in total compensation. In the new global economy, good jobs are going to where the labor is the cheapest, and that means going away from American workers.
Even the unionized workers that remained at the manufacturing facilities that Ford kept open were forced to agree to very substantial concessions to their labor contracts just to keep their jobs.
Meanwhile, literally hundreds of Ford dealerships have been shut down from coast to coast. All of this "dealership downsizing" has also come at a very high price - thousands of good American jobs.
So should we be celebrating record profits at Ford?
Not really.
The truth is that in the pursuit of profits, Ford has devastated quite a few local communities.
For example, Ford recently announced the closure of a facility that produces the Ford Ranger in St. Paul, Minnesota.
Closing that plant eliminates 750 U.S. jobs.
But don't people still want to buy Ford Rangers?
Yes, of course Ford Rangers are still quite popular, and Minnesota desperately wanted to keep that factory open.
In fact, Minnesota Governor Tim Pawlenty offered Ford a very generous multi-million dollar incentive package full of tax cuts and job creation incentives to keep the factory open.
But it didn't work.
Ford closed the factory anyway.
So where are all of those Ford Rangers going to be manufactured now?
Well, the statement about the plant closing issued by Ford did not reveal that tidbit, but it did offer some clues....
"Ford continues to concentrate on implementing the plan we initiated four years ago to streamline our plant operations and better leverage our global platforms. At this time, the Twin Cities Assembly Plant does not fit into our global manufacturing strategy."
When you see big corporations like Ford use the word "global", what it really means is some place other than America.
So don't be too quick to applaud Ford for record breaking profits.
The truth is that if current trends continue, we are going to end up with literally tens of millions of unemployed American workers.
We are shipping factories, jobs and wealth overseas so rapidly that it is hard to even comprehend what is going on.
In 1985, the U.S. trade deficit with China was 6 million dollars for the entire year. In the month of August alone, the U.S. trade deficit with China was over 28 billion dollars.
Just think about that for a minute.
World trade has been completely and totally revolutionized over the past 25 years, and America is losing.
The United States has lost approximately 42,400 factories since 2001.
So how many more are we going to lose before our "leaders" do something about it?
As of the end of 2009, less than 12 million Americans worked in manufacturing. The last time less than 12 million Americans were employed in manufacturing was in 1941.
The sad truth is that the United States is being deindustrialized. The big global corporations have figured out that they don't really need American workers anymore, and that is really, really bad news for the American middle class.
Without good paying jobs, the future of the middle class is incredibly bleak.
FTC ends Google 'Street View' investigation without fines
By John D. Sutter, CNN - October 27, 2010
(CNN) -- The U.S. Federal Trade Commission has called off its investigation of Google's "Street View" mapping program without issusing fines to the company, according to a letter sent from the FTC to Google on Wednesday.
The federal agency had been investigating the fact that Google collected communications, including passwords and e-mails, from people who used open Wi-Fi networks in their homes.
The data collections, which Google says were inadvertent, happened while Google was driving around taking pictures for the Street View function on Google Maps, the Mountain View, California, company said.
The FTC said Google has sufficiently addressed the problem.
"Google has made assurances to the FTC that the company has not used and will not use any of the payload data collected in any Google product or service, now or in the future," David C. Vladeck, the FTC's director for consumer protection, says a letter to Google, which was posted on the FTC's website.
"This assurance is critical to mitigate the potential harm to consumers from the collection of payload data. Because of these commitments, we are ending our inquiry into this matter at this time."
Google, which first mentioned the fact that it had "sniffed" this Wi-Fi data in May, said in a blog post last week that the data included more sensitive information than was previously thought.
"In some instances entire e-mails and URLs were captured, as well as passwords," Alan Eustace, Google's senior vice-president of engineering and research, wrote in a post on that company's blog.
Wednesday's FTC letter acknowledges Google has made changes since investigators uncovered the privacy breaches.
Those changes include "appointing a director of privacy for engineering and product management; adding core privacy training for key employees; and incorporating a formal privacy review process into the design phases of new initiatives."
The FTC letter states: "The company also publicly stated its intention to delete the inadvertently collected payload data as soon as possible."
The United States, however, isn't the only country that's been investigating Google's data collections in relation to Street View, a function of Google Maps that lets users see what streets look like from a man-on-the-street point of view.
More on the international scope of this issue from a CNN explainer:
Last week, the Canadian government said that Google broke the country's law by collecting the data but closed an investigation after calling it "a careless error."
In France, a commission that began investigating this summer ruled that personal data had been collected. Authorities cracked down, even pulling over Street View vehicles to make sure they had stopped collecting personal information.
The Czech Republic has banned Google from expanding the service, and the news sparked an online privacy debate in Germany, where Google is allowing people to opt out of Street View before the images go live.
Great Britain, however, determined that none of the information gathered there was sensitive.
(CNN) -- The U.S. Federal Trade Commission has called off its investigation of Google's "Street View" mapping program without issusing fines to the company, according to a letter sent from the FTC to Google on Wednesday.
The federal agency had been investigating the fact that Google collected communications, including passwords and e-mails, from people who used open Wi-Fi networks in their homes.
The data collections, which Google says were inadvertent, happened while Google was driving around taking pictures for the Street View function on Google Maps, the Mountain View, California, company said.
The FTC said Google has sufficiently addressed the problem.
"Google has made assurances to the FTC that the company has not used and will not use any of the payload data collected in any Google product or service, now or in the future," David C. Vladeck, the FTC's director for consumer protection, says a letter to Google, which was posted on the FTC's website.
"This assurance is critical to mitigate the potential harm to consumers from the collection of payload data. Because of these commitments, we are ending our inquiry into this matter at this time."
Google, which first mentioned the fact that it had "sniffed" this Wi-Fi data in May, said in a blog post last week that the data included more sensitive information than was previously thought.
"In some instances entire e-mails and URLs were captured, as well as passwords," Alan Eustace, Google's senior vice-president of engineering and research, wrote in a post on that company's blog.
Wednesday's FTC letter acknowledges Google has made changes since investigators uncovered the privacy breaches.
Those changes include "appointing a director of privacy for engineering and product management; adding core privacy training for key employees; and incorporating a formal privacy review process into the design phases of new initiatives."
The FTC letter states: "The company also publicly stated its intention to delete the inadvertently collected payload data as soon as possible."
The United States, however, isn't the only country that's been investigating Google's data collections in relation to Street View, a function of Google Maps that lets users see what streets look like from a man-on-the-street point of view.
More on the international scope of this issue from a CNN explainer:
Last week, the Canadian government said that Google broke the country's law by collecting the data but closed an investigation after calling it "a careless error."
In France, a commission that began investigating this summer ruled that personal data had been collected. Authorities cracked down, even pulling over Street View vehicles to make sure they had stopped collecting personal information.
The Czech Republic has banned Google from expanding the service, and the news sparked an online privacy debate in Germany, where Google is allowing people to opt out of Street View before the images go live.
Great Britain, however, determined that none of the information gathered there was sensitive.
Facebook makes foray into California lobbying by Targeting Privacy Bill
Firm targets privacy bill; ‘They just worked in the background’
By John Letzing, MarketWatch - Oct. 27, 2010
SAN FRANCISCO (MarketWatch) — Facebook Inc., which has been bolstering its political influence as it grows in popularity, has made an initial foray into lobbying in its home state by targeting a specific privacy bill, according to filings with the California Secretary of State’s office.
Facebook spent more than $6,600 on lobbying in California for the period between April and June, according to a recent filing. The Palo Alto, Calif.-based company’s attention was specifically directed at the Social Networking Privacy Act, a bill introduced in the state Senate in February, which would restrict social-networking sites from displaying the addresses and phone numbers of minors.
The reported lobbying activity underlines Facebook’s need to make its case with both state and federal legislators, amid growing concerns about online privacy. It also highlights the early stage of the social-networking firm’s progress.
Tech news: LimeWire, MySpace
Popular file-sharing service LimeWire has been ordered to permanently shut down after a federal judge found it liable for copyright infringement. Also: MySpace unveiled a redesign focused on sharing videos, music and other media.
Google Inc. (NASDAQ:GOOG) , for example, reported spending nearly seven times as much as Facebook on lobbying state government in California for the period ended in June, according to public filings.
Facebook’s lobbying activity in California comes as the company has tapped Sacramento-based Gonzalez Public Affairs to represent it at the state capitol.
The bill drawing Facebook’s interest, the Social Networking Privacy Act, was introduced by State Sen. Ellen Corbett, a Bay Area Democrat. It calls for businesses providing social-networking services online to refrain from displaying the home address or phone number of users under 18 years of age, or face civil penalties.
The bill had been passed in the state Senate in April by a margin of 25 to 4, before running aground in the state Assembly. “By the time it got to the assembly, the opposition lobbying had begun,” Corbett said.
She added that her staff had reached out to Facebook for input, though “It appears they just worked in the background, to kill the bill.”
A Facebook spokesman said the company is isn’t prepared to comment.
Facebook’s California lobbying report included an expense for dinner with the majority leader of the state Assembly, Charles Calderon, at a Sacramento restaurant in June.
Calderon, a Southern California Democrat and a member of the state Assembly’s Committee on Arts, Entertainment, Sports, Tourism and Internet Media, voted in June to move the Social Networking Privacy Act forward for review by the body’s judiciary committee. Despite Calderon’s vote, the legislation stalled.
A spokesman for Calderon said he is “still open to hearing the issues” related to the bill.
Corbett could reintroduce the Social Networking Privacy Act, though she said she hasn’t decided what to do yet. “This is an issue I’m very interested in delving much further into,” she added.
Critics of the bill have called it well intentioned but flawed. A Washington, D.C.-based group called Stop Child Predators said in a statement issued in July that “educating minors of the real risks they face online is essential to keeping them safe, and parents shouldn’t be encouraged to believe that restricting the display of certain information … will make their children safer.”
Facebook’s policies state that it’s off-limits to children under 13, and recommend that minors over 13 ask their parents before posting information about themselves.
Founded in 2004, Facebook has a vested interest in the increase in social contact and sharing of information online — a trend that’s drawn scrutiny from privacy advocates and regulators around the world.
The closely held company is young, but growing up fast. Facebook boasts more than 500 million active users, and is currently valued at $32.8 billion, according to SharesPost Inc., which provides an exchange for shares in private firms.
Though it isn’t a precise comparison, that valuation among private investors would place Facebook well ahead of the current, combined public market value of Internet stalwarts Yahoo Inc. (NASDAQ:YHOO) and AOL Inc. (NYSE:AOL)
In addition to efforts made on its own, Facebook is a member of larger organizations that lobby lawmakers.
TechNet, a group that includes Facebook, Google, Microsoft Corp. (NASDAQ:MSFT) and others, also has made lobbying efforts in California related to the Social Networking Privacy Act, according to public filings.
While expanding its political influence close to home, Facebook also has strengthened its presence in Washington. According to records compiled by the Center for Responsive Politics, Facebook spent $60,000 lobbying members of Congress and federal regulators in the second quarter ended in June, up from $41,390 in prior period.
The lobbying activity comes as public flare-ups over Facebook’s privacy practices have become commonplace.
A Freedom of Information Act request to the U.S. Federal Trade Commission, made by MarketWatch in May for communications between Facebook and the regulator concerning changes to Facebook privacy policies during the five months ended in April, was denied.
The FTC said in a response letter in July that some of the requested records were exempt from disclosure, because they include “information obtained by the commission in a law-enforcement investigation.”
The Electronic Privacy Information Center as well as other privacy advocates called last year for an FTC probe of Facebook’s privacy and security practices.
By John Letzing, MarketWatch - Oct. 27, 2010
SAN FRANCISCO (MarketWatch) — Facebook Inc., which has been bolstering its political influence as it grows in popularity, has made an initial foray into lobbying in its home state by targeting a specific privacy bill, according to filings with the California Secretary of State’s office.
Facebook spent more than $6,600 on lobbying in California for the period between April and June, according to a recent filing. The Palo Alto, Calif.-based company’s attention was specifically directed at the Social Networking Privacy Act, a bill introduced in the state Senate in February, which would restrict social-networking sites from displaying the addresses and phone numbers of minors.
The reported lobbying activity underlines Facebook’s need to make its case with both state and federal legislators, amid growing concerns about online privacy. It also highlights the early stage of the social-networking firm’s progress.
Tech news: LimeWire, MySpace
Popular file-sharing service LimeWire has been ordered to permanently shut down after a federal judge found it liable for copyright infringement. Also: MySpace unveiled a redesign focused on sharing videos, music and other media.
Google Inc. (NASDAQ:GOOG) , for example, reported spending nearly seven times as much as Facebook on lobbying state government in California for the period ended in June, according to public filings.
Facebook’s lobbying activity in California comes as the company has tapped Sacramento-based Gonzalez Public Affairs to represent it at the state capitol.
The bill drawing Facebook’s interest, the Social Networking Privacy Act, was introduced by State Sen. Ellen Corbett, a Bay Area Democrat. It calls for businesses providing social-networking services online to refrain from displaying the home address or phone number of users under 18 years of age, or face civil penalties.
The bill had been passed in the state Senate in April by a margin of 25 to 4, before running aground in the state Assembly. “By the time it got to the assembly, the opposition lobbying had begun,” Corbett said.
She added that her staff had reached out to Facebook for input, though “It appears they just worked in the background, to kill the bill.”
A Facebook spokesman said the company is isn’t prepared to comment.
Facebook’s California lobbying report included an expense for dinner with the majority leader of the state Assembly, Charles Calderon, at a Sacramento restaurant in June.
Calderon, a Southern California Democrat and a member of the state Assembly’s Committee on Arts, Entertainment, Sports, Tourism and Internet Media, voted in June to move the Social Networking Privacy Act forward for review by the body’s judiciary committee. Despite Calderon’s vote, the legislation stalled.
A spokesman for Calderon said he is “still open to hearing the issues” related to the bill.
Corbett could reintroduce the Social Networking Privacy Act, though she said she hasn’t decided what to do yet. “This is an issue I’m very interested in delving much further into,” she added.
Critics of the bill have called it well intentioned but flawed. A Washington, D.C.-based group called Stop Child Predators said in a statement issued in July that “educating minors of the real risks they face online is essential to keeping them safe, and parents shouldn’t be encouraged to believe that restricting the display of certain information … will make their children safer.”
Facebook’s policies state that it’s off-limits to children under 13, and recommend that minors over 13 ask their parents before posting information about themselves.
Founded in 2004, Facebook has a vested interest in the increase in social contact and sharing of information online — a trend that’s drawn scrutiny from privacy advocates and regulators around the world.
The closely held company is young, but growing up fast. Facebook boasts more than 500 million active users, and is currently valued at $32.8 billion, according to SharesPost Inc., which provides an exchange for shares in private firms.
Though it isn’t a precise comparison, that valuation among private investors would place Facebook well ahead of the current, combined public market value of Internet stalwarts Yahoo Inc. (NASDAQ:YHOO) and AOL Inc. (NYSE:AOL)
In addition to efforts made on its own, Facebook is a member of larger organizations that lobby lawmakers.
TechNet, a group that includes Facebook, Google, Microsoft Corp. (NASDAQ:MSFT) and others, also has made lobbying efforts in California related to the Social Networking Privacy Act, according to public filings.
While expanding its political influence close to home, Facebook also has strengthened its presence in Washington. According to records compiled by the Center for Responsive Politics, Facebook spent $60,000 lobbying members of Congress and federal regulators in the second quarter ended in June, up from $41,390 in prior period.
The lobbying activity comes as public flare-ups over Facebook’s privacy practices have become commonplace.
A Freedom of Information Act request to the U.S. Federal Trade Commission, made by MarketWatch in May for communications between Facebook and the regulator concerning changes to Facebook privacy policies during the five months ended in April, was denied.
The FTC said in a response letter in July that some of the requested records were exempt from disclosure, because they include “information obtained by the commission in a law-enforcement investigation.”
The Electronic Privacy Information Center as well as other privacy advocates called last year for an FTC probe of Facebook’s privacy and security practices.
Kucinich: Vote or surrender to the ‘forces of nihilism’
By Sahil Kapur - Wednesday, October 27th, 2010
WASHINGTON – As Democrats fear a wave of losses in next Tuesday's elections, due in part to a lack of enthusiasm within their base, one progressive champion made an impassioned plea for liberals to head to the polls and and vote.
"We can get out there and make our voices heard, or we can let the forces of nihilism take over," Rep. Dennis Kucinich (D-OH) told Raw Story in an exclusive interview late Tuesday afternoon.
The Cleveland Democrat warned progressives that a Republican takeover of the House of Representatives – a likely scenario, according to election experts – could surrender the levers of power to "megalomaniacal neoconservatives who are more in need of mental attention."
"There's no question about it," he said. "We have to vote."
Kucinich, a seven-term congressman who seems to be in no danger, sympathized with liberals who are disenchanted with the Democratic Party, but insisted they must "work within the system" to achieve the results they want, arguing that tuning out wasn't a better solution.
Story continues below...
"I would never try to minimize their concerns. I understand them," he said. "I wish we had broader options. I certainly don't like our political system, but I'm not prepared to walk away."
If there's anyone in Congress who shares liberal misgivings about the Obama administration, it's Kucinich. From health care to the economy to the Iraq and Afghanistan wars, he has been outspoken about his criticisms. "But this election is a choice," he said.
Studies reveal that both of the major parties are unpopular with the public – some even say Americans still prefer Democrats – but polls consistently show that Republicans are far more likely to vote next Tuesday.
An NBC/Wall Street Journal survey last week found that Republicans are more likely to head to the polls on Nov. 2 than Democrats by a whopping 20 percentage points.
Kucinich, who ran unsuccessfully for the presidency in 2004 and 2008, said he doesn't envision any circumstance in which he'd run again in 2012.
"I don’t see it," he said. "I think anybody who runs against Barack Obama for the Democratic nomination would be handing the presidency to the other party on a silver platter."
WASHINGTON – As Democrats fear a wave of losses in next Tuesday's elections, due in part to a lack of enthusiasm within their base, one progressive champion made an impassioned plea for liberals to head to the polls and and vote.
"We can get out there and make our voices heard, or we can let the forces of nihilism take over," Rep. Dennis Kucinich (D-OH) told Raw Story in an exclusive interview late Tuesday afternoon.
The Cleveland Democrat warned progressives that a Republican takeover of the House of Representatives – a likely scenario, according to election experts – could surrender the levers of power to "megalomaniacal neoconservatives who are more in need of mental attention."
"There's no question about it," he said. "We have to vote."
Kucinich, a seven-term congressman who seems to be in no danger, sympathized with liberals who are disenchanted with the Democratic Party, but insisted they must "work within the system" to achieve the results they want, arguing that tuning out wasn't a better solution.
Story continues below...
"I would never try to minimize their concerns. I understand them," he said. "I wish we had broader options. I certainly don't like our political system, but I'm not prepared to walk away."
If there's anyone in Congress who shares liberal misgivings about the Obama administration, it's Kucinich. From health care to the economy to the Iraq and Afghanistan wars, he has been outspoken about his criticisms. "But this election is a choice," he said.
Studies reveal that both of the major parties are unpopular with the public – some even say Americans still prefer Democrats – but polls consistently show that Republicans are far more likely to vote next Tuesday.
An NBC/Wall Street Journal survey last week found that Republicans are more likely to head to the polls on Nov. 2 than Democrats by a whopping 20 percentage points.
Kucinich, who ran unsuccessfully for the presidency in 2004 and 2008, said he doesn't envision any circumstance in which he'd run again in 2012.
"I don’t see it," he said. "I think anybody who runs against Barack Obama for the Democratic nomination would be handing the presidency to the other party on a silver platter."
Campaign Cash, Corruption, Corporate Power
by Laura Flanders - Wednesday, October 27, 2010 by GRITtv
Campaign cash—we're drowning in a flood of it. As Katrina vanden Heuvel noted yesterday on GRITtv, this is on track to be a $5 billion election—and it's not over.
We used to have words for spending like that on politicians: bribery. Remember all that quaint anti-colonial talk about "Independence"? As Zephyr Teachout commented in a meeting I was part of, hosted by the Coffee Party, those founding fathers were all about independence from corruption and prosecuting bribery. Remember the phrase "anti-Trust"?
Now it seems the most we can hope for is “transparency.” Well, Transparency International's Corruption Perceptions Index is out now, and it's pretty transparent: The U.S. has dropped in the world rankings to 22nd, below Chile and just above Uruguay. “The world's most peaceful countries score the best” reports The UK Guardian—places like Denmark and New Zealand—hmm. Maybe there's a connection. (You'll be relieved to know we're above Somalia.)
Just think how far we've come. Once tea partiers fought corporate power. Now they live off it. Once corruption and bribery were the Axis of Evil. Today they're Supreme Court-confirmed law. It's trust-busting that the courts can't stand.
In this election, poor people will vote on rich candidates covered by even richer corporate media. Bloated on a diet of billions of dollars of anonymous campaign ads, money media are nothing but happy. What would Tom Paine say?
He might say what Zephyr Teachout said. "What our country needs is less corruption and more good old fashioned bribery."
At least then we could prosecute the thieves of our democracy.
vidlink
Campaign cash—we're drowning in a flood of it. As Katrina vanden Heuvel noted yesterday on GRITtv, this is on track to be a $5 billion election—and it's not over.
We used to have words for spending like that on politicians: bribery. Remember all that quaint anti-colonial talk about "Independence"? As Zephyr Teachout commented in a meeting I was part of, hosted by the Coffee Party, those founding fathers were all about independence from corruption and prosecuting bribery. Remember the phrase "anti-Trust"?
Now it seems the most we can hope for is “transparency.” Well, Transparency International's Corruption Perceptions Index is out now, and it's pretty transparent: The U.S. has dropped in the world rankings to 22nd, below Chile and just above Uruguay. “The world's most peaceful countries score the best” reports The UK Guardian—places like Denmark and New Zealand—hmm. Maybe there's a connection. (You'll be relieved to know we're above Somalia.)
Just think how far we've come. Once tea partiers fought corporate power. Now they live off it. Once corruption and bribery were the Axis of Evil. Today they're Supreme Court-confirmed law. It's trust-busting that the courts can't stand.
In this election, poor people will vote on rich candidates covered by even richer corporate media. Bloated on a diet of billions of dollars of anonymous campaign ads, money media are nothing but happy. What would Tom Paine say?
He might say what Zephyr Teachout said. "What our country needs is less corruption and more good old fashioned bribery."
At least then we could prosecute the thieves of our democracy.
vidlink
Conservatives Push Absurd Lie that Wall Street Hustlers Were Innocent Victims ... of Poor People
Deregulation allowed Wall Street to build a house of cards on America's mortgage industry, but many conservatives live in a parallel universe in which the banks are blameless.
by Joshua Holland - Wednesday, October 27, 2010 by AlterNet
It’s an alluring story line for those who are ideologically predisposed to blame “inner city” people instead of MBAs in suits roaming the executive suite. It’s also patent nonsense—a Big Lie that has nonetheless become an object of almost religious belief for some on the Right.
Jeb Hensarling, a notably obtuse Republican back-bencher from Texas, wrote that “the conservative case is simple”:
The [Community Reinvestment Act] compelled banks to relax their traditional underwriting practices in favor of more “flexible” criteria. These subjective standards were then applied to all borrowers, not just low-income individuals, leading to a surge in lower-quality loans. . . . Blame should [also be] directed at Fannie [Mae] and Freddie [Mac], and their thirst for weaker underwriting to help meet their federally mandated “affordable housing” goals. . . . This distortion has had seismic consequences as market participants, wrongly believing GSE-touched loans were sanctioned by the government and therefore safe, began to rely on a government mandate as a substitute for their own due diligence.
This tale has everything a conservative could want—Big Government overreach, well-intentioned but out-of-touch liberals causing devastating unanticipated consequences with their social tinkering, and even their favorite bogeyman, ACORN, and other low-income housing advocates that have pushed for increased home-ownership among the poor.
The narrative gained steam with an influential op-ed in the Wall Street Journal by Peter Wallison, a fellow with the American Enterprise Institute (who, according to his bio, “had a significant role in the development of the Reagan administration’s proposals for the deregulation of the financial services industry”). Wallison found that “Almost two-thirds of all the bad mortgages in our financial system, many of which are now defaulting at unprecedented rates, were bought by government agencies or required by government regulations.”
The data shows that the principal buyers were insured banks, government sponsored enterprises (GSEs) such as Fannie Mae and Freddie Mac, and the FHA—all government agencies or private companies forced to comply with government mandates about mortgage lending.
The sleight-of-hand here is pretty straightforward. The U.S. government regulates lenders and provides deposit insurance to banks, which means that a large chunk of all home loans—good, bad, and in between—have some connection to a government program. It’s like saying that the government is responsible for pollution because the EPA regulates industrial emissions.
Yet no bank has ever been “forced to comply with government mandates about mortgage lending.” There are no “government mandates,” and there never were. In order to qualify for government-backed deposit insurance—a benefit that banks aren’t forced to accept but enjoy having—the Community Reinvestment Act and similar measures designed to prevent discrimination in lending (to qualified individuals) only encourage banks to lend in all of the areas where they do business. And Section 802 (b) of the Act stresses that all loans must be “consistent with safe and sound operations”—it’s the opposite of requiring that lenders write risky mortgages.
There are no penalties for noncompliance with CRA guidelines. The only “stick” hanging over banks that fail to meet those standards is that their refusal might be taken into account by regulators when they want to open new branches or merge with other financial institutions. What’s more, there are no defined standards for CRA compliance, and within the banking community, the loose guidelines are considered to be somewhat of a joke.
As Sheila Blair, the chairwoman of the FDIC, asked in a December 2008 speech, “Where in the CRA does it say: make loans to people who can’t afford to repay? Nowhere! And the fact is, the lending practices that are causing problems today were driven by a desire for market share and revenue growth . . . pure and simple.”
Fannie and Freddie: Tempted by Easy Profits
Fannie Mae and Freddie Mac were created by an act of Congress, but they are (or were, until being taken over in the wake of the housing crash) private, for-profit entities whose dual mandate was to increase the availability of mortgages to moderate- and low-income families, and at the same time turn a profit for their shareholders. Fannie and Freddie did end up with a very large portfolio of subprime loans, with a high rate of default, but they didn’t get into the market because the government mandated it. They dived in deep because there were profits to be made as the housing bubble expanded. As Mary Kane, a finance reporter for the Washington Independent, put it:
Neither the Community Reinvestment Act—the law most cited as the culprit—nor other affordable housing goals set by the government forced Fannie, Freddie or any other lender to make loans they didn’t want to. The lure of the subprime market was high yields and healthy profit margins—it’s as simple as that.
Contrary to the conservative spin, University of Michigan law professor Michael Barr told a congressional committee that although there was in fact quite a bit of irresponsible lending in low-income communities in the late 1990s and the early 2000s, “More than half of subprime loans were made by independent mortgage companies not subject to comprehensive federal supervision; another 30 percent of such originations were made by affiliates of banks or thrifts, which are not subject to routine examination or supervision, and the remaining 20 percent were made by banks and thrifts [subject to CRA standards].” Barr concluded, “The worst and most widespread abuses occurred in the institutions with the least federal oversight [italics added].”
That’s not to say that millions of Americans didn’t bite off more than they would eventually be able to chew in the housing market. A lot of people looking to turn a quick buck by capturing the booming value of real estate in the mid- to late 2000s bought property with “teaser” loans that offered very low rates for the first few years; the investors assumed that they’d be able to turn a tidy profit before higher interest rates kicked in. Many of those individuals have since found themselves “under water”—owing more on their homes (and investment properties) than they’re worth.
Yet it’s worth noting that most of the experts also didn’t identify the real estate bubble as a problem, even as home prices far surpassed values that could be reasonably explained by the laws of supply and demand. Irrational exuberance was the theme of the day. In 2006, David Learah, the former head of the National Association of Realtors, wrote a book titled Why the Real Estate Boom Will Not Bust—And How You Can Profit from It: How to Build Wealth in Today’s Expanding Real Estate Market. The book made quite a splash at the time.
In 2010, former Fed chairman Alan Greenspan offered a bit of historical revisionism to a House committee investigating the causes of the financial crisis, telling lawmakers, “In 2002, I expressed concern . . . that our extraordinary housing boom, financed by very large increases in mortgage debt, cannot continue indefinitely. . . . I warned of the consequences of this situation in testimony before the Senate Banking Committee in 2004.”
Writing in the Washington Post, Dana Milbank offered a corrective with some of the highlights of Greenspan’s congressional testimony at the peak of the housing bubble. In 2005, Greenspan told lawmakers, “A bubble in home prices for the nation as a whole does not appear likely.” He added, “Home price declines . . . were they to occur, likely would not have substantial macroeconomic implications,” and explained that “nationwide banking and widespread securitization of mortgages make it less likely that financial intermediation would be impaired.”
In English, that last bit meant “Banks won’t get into serious trouble even if things do go to hell,” and we know how well that prediction turned out. If Greenspan could be so wrong and the smart people at the Washington Post and the New York Times couldn’t see this huge, dangerously inflated housing bubble, how was your average couple trying to get a place to live or the small investor looking for a few bucks in rental income supposed to make a rational decision about how much debt to take on? That’s not a defense of individuals who got in over their heads; it’s simply an important bit of context.
The narrative that the real estate crash and the subsequent recession were the fault of borrowers, especially poor and middle-income borrowers—while members of the financial community were innocent victims—is not only revisionism of the worst kind, but it’s an especially egregious lie.
The obvious sin of this claim is that it shifts responsibility for the mess away from those who created it, but what makes it even more disgraceful is that conservatives have long argued that efforts to increase home ownership among low-income families and communities of color was the “free market” thing to do (and have, to some degree, negated the need for a decent social safety net). It was George W. Bush, not Vladimir Lenin, who said in a 2002 speech, “We have a problem here in America . . . a homeownership gap,” and said, “we’ve got to work together to close [the gap] for the good of our country.” This was standard American Enterprise Institute–quality conservative fare.
Blaming individuals is easy—it’s not hard to understand how people could borrow a bunch of cash they were later unable to pay back. The real cause of the housing crash is, of course, a far more complicated tale. And it’s a story that ultimately represents the abject failure of conservative economic mythology.
by Joshua Holland - Wednesday, October 27, 2010 by AlterNet
AlterNet is proud to present this excerpt from senior writer Joshua Holland's new book, The Fifteen Biggest Lies about the Economy (And Everything Else the Right Doesn't Want You to Know about Taxes, Jobs, and Corporate America).Perhaps the most pernicious right-wing lie of late is that the Wall Street hustlers who came close to bringing the global economy to its knees in 2008 were just innocent victims of government-sponsored programs that forced them to lower lending standards in a misguided effort to increase home ownership among the poor (read: dark-skinned).
It’s an alluring story line for those who are ideologically predisposed to blame “inner city” people instead of MBAs in suits roaming the executive suite. It’s also patent nonsense—a Big Lie that has nonetheless become an object of almost religious belief for some on the Right.
Jeb Hensarling, a notably obtuse Republican back-bencher from Texas, wrote that “the conservative case is simple”:
The [Community Reinvestment Act] compelled banks to relax their traditional underwriting practices in favor of more “flexible” criteria. These subjective standards were then applied to all borrowers, not just low-income individuals, leading to a surge in lower-quality loans. . . . Blame should [also be] directed at Fannie [Mae] and Freddie [Mac], and their thirst for weaker underwriting to help meet their federally mandated “affordable housing” goals. . . . This distortion has had seismic consequences as market participants, wrongly believing GSE-touched loans were sanctioned by the government and therefore safe, began to rely on a government mandate as a substitute for their own due diligence.
This tale has everything a conservative could want—Big Government overreach, well-intentioned but out-of-touch liberals causing devastating unanticipated consequences with their social tinkering, and even their favorite bogeyman, ACORN, and other low-income housing advocates that have pushed for increased home-ownership among the poor.
The narrative gained steam with an influential op-ed in the Wall Street Journal by Peter Wallison, a fellow with the American Enterprise Institute (who, according to his bio, “had a significant role in the development of the Reagan administration’s proposals for the deregulation of the financial services industry”). Wallison found that “Almost two-thirds of all the bad mortgages in our financial system, many of which are now defaulting at unprecedented rates, were bought by government agencies or required by government regulations.”
The data shows that the principal buyers were insured banks, government sponsored enterprises (GSEs) such as Fannie Mae and Freddie Mac, and the FHA—all government agencies or private companies forced to comply with government mandates about mortgage lending.
The sleight-of-hand here is pretty straightforward. The U.S. government regulates lenders and provides deposit insurance to banks, which means that a large chunk of all home loans—good, bad, and in between—have some connection to a government program. It’s like saying that the government is responsible for pollution because the EPA regulates industrial emissions.
Yet no bank has ever been “forced to comply with government mandates about mortgage lending.” There are no “government mandates,” and there never were. In order to qualify for government-backed deposit insurance—a benefit that banks aren’t forced to accept but enjoy having—the Community Reinvestment Act and similar measures designed to prevent discrimination in lending (to qualified individuals) only encourage banks to lend in all of the areas where they do business. And Section 802 (b) of the Act stresses that all loans must be “consistent with safe and sound operations”—it’s the opposite of requiring that lenders write risky mortgages.
There are no penalties for noncompliance with CRA guidelines. The only “stick” hanging over banks that fail to meet those standards is that their refusal might be taken into account by regulators when they want to open new branches or merge with other financial institutions. What’s more, there are no defined standards for CRA compliance, and within the banking community, the loose guidelines are considered to be somewhat of a joke.
As Sheila Blair, the chairwoman of the FDIC, asked in a December 2008 speech, “Where in the CRA does it say: make loans to people who can’t afford to repay? Nowhere! And the fact is, the lending practices that are causing problems today were driven by a desire for market share and revenue growth . . . pure and simple.”
Fannie and Freddie: Tempted by Easy Profits
Fannie Mae and Freddie Mac were created by an act of Congress, but they are (or were, until being taken over in the wake of the housing crash) private, for-profit entities whose dual mandate was to increase the availability of mortgages to moderate- and low-income families, and at the same time turn a profit for their shareholders. Fannie and Freddie did end up with a very large portfolio of subprime loans, with a high rate of default, but they didn’t get into the market because the government mandated it. They dived in deep because there were profits to be made as the housing bubble expanded. As Mary Kane, a finance reporter for the Washington Independent, put it:
Neither the Community Reinvestment Act—the law most cited as the culprit—nor other affordable housing goals set by the government forced Fannie, Freddie or any other lender to make loans they didn’t want to. The lure of the subprime market was high yields and healthy profit margins—it’s as simple as that.
Contrary to the conservative spin, University of Michigan law professor Michael Barr told a congressional committee that although there was in fact quite a bit of irresponsible lending in low-income communities in the late 1990s and the early 2000s, “More than half of subprime loans were made by independent mortgage companies not subject to comprehensive federal supervision; another 30 percent of such originations were made by affiliates of banks or thrifts, which are not subject to routine examination or supervision, and the remaining 20 percent were made by banks and thrifts [subject to CRA standards].” Barr concluded, “The worst and most widespread abuses occurred in the institutions with the least federal oversight [italics added].”
That’s not to say that millions of Americans didn’t bite off more than they would eventually be able to chew in the housing market. A lot of people looking to turn a quick buck by capturing the booming value of real estate in the mid- to late 2000s bought property with “teaser” loans that offered very low rates for the first few years; the investors assumed that they’d be able to turn a tidy profit before higher interest rates kicked in. Many of those individuals have since found themselves “under water”—owing more on their homes (and investment properties) than they’re worth.
Yet it’s worth noting that most of the experts also didn’t identify the real estate bubble as a problem, even as home prices far surpassed values that could be reasonably explained by the laws of supply and demand. Irrational exuberance was the theme of the day. In 2006, David Learah, the former head of the National Association of Realtors, wrote a book titled Why the Real Estate Boom Will Not Bust—And How You Can Profit from It: How to Build Wealth in Today’s Expanding Real Estate Market. The book made quite a splash at the time.
In 2010, former Fed chairman Alan Greenspan offered a bit of historical revisionism to a House committee investigating the causes of the financial crisis, telling lawmakers, “In 2002, I expressed concern . . . that our extraordinary housing boom, financed by very large increases in mortgage debt, cannot continue indefinitely. . . . I warned of the consequences of this situation in testimony before the Senate Banking Committee in 2004.”
Writing in the Washington Post, Dana Milbank offered a corrective with some of the highlights of Greenspan’s congressional testimony at the peak of the housing bubble. In 2005, Greenspan told lawmakers, “A bubble in home prices for the nation as a whole does not appear likely.” He added, “Home price declines . . . were they to occur, likely would not have substantial macroeconomic implications,” and explained that “nationwide banking and widespread securitization of mortgages make it less likely that financial intermediation would be impaired.”
In English, that last bit meant “Banks won’t get into serious trouble even if things do go to hell,” and we know how well that prediction turned out. If Greenspan could be so wrong and the smart people at the Washington Post and the New York Times couldn’t see this huge, dangerously inflated housing bubble, how was your average couple trying to get a place to live or the small investor looking for a few bucks in rental income supposed to make a rational decision about how much debt to take on? That’s not a defense of individuals who got in over their heads; it’s simply an important bit of context.
The narrative that the real estate crash and the subsequent recession were the fault of borrowers, especially poor and middle-income borrowers—while members of the financial community were innocent victims—is not only revisionism of the worst kind, but it’s an especially egregious lie.
The obvious sin of this claim is that it shifts responsibility for the mess away from those who created it, but what makes it even more disgraceful is that conservatives have long argued that efforts to increase home ownership among low-income families and communities of color was the “free market” thing to do (and have, to some degree, negated the need for a decent social safety net). It was George W. Bush, not Vladimir Lenin, who said in a 2002 speech, “We have a problem here in America . . . a homeownership gap,” and said, “we’ve got to work together to close [the gap] for the good of our country.” This was standard American Enterprise Institute–quality conservative fare.
Blaming individuals is easy—it’s not hard to understand how people could borrow a bunch of cash they were later unable to pay back. The real cause of the housing crash is, of course, a far more complicated tale. And it’s a story that ultimately represents the abject failure of conservative economic mythology.
Subscribe to:
Posts (Atom)